With these hard times upon us all, more and more people are looking for ways to help boost their current financial situations. Often times it’s these people who fall pray to scammers looking to take advantage of the situation. It is important that you ignore or immediately delete any suspicious emails asking for personal information. Any legitimate financial institution what needs that kind of personal information will not just send you an email. Also, be wary of companies offering loans even for those with low credit ratings the modus operandi is to have people pay them a supposed processing fee, and once that fee is paid, then the customer doesn’t hear from the company again. It’s a sad fact that many people are taking advantage of the situation, but you need to always be alert and careful when dealing with your money.
One of people’s major goal in life is to be able to buy their dream home. But what if you’ve saved so much money for so long only to find out that you lost your money from a real estate fraud? Real estate fraud is an illegal activity, it is a misrepresentation of information regarding real estate documents or mortgage loans.
There are different types of frauds when it comes to real estate, the most common ones are computer fraud (anything real estate related that is changed or stolen online), title fraud (stolen identity used to sell properties), foreclosure fraud (mortgage lender steals consumer’s home to sell to cover their own debt) These cases are all punishable by law. A person who is caught doing real estate fraud can be put into jail and charged a hefty fine. It is a serious crime and should not be taken lightly as it victimizes thousands of people every year.
There are so many greedy, conniving people in this world that you always have to be careful so that you don’t get cheated. Specially when it comes to big investments. Some people can be very gullible and trust people easily that they end up in a tight spot. So, do not allow yourself to be a victim. There are ways to not be scammed, you just have to know what to do. Here are some things you need to think of before you give your full trust to a person.
- Always work with a reputable real estate agency. Research for companies that have already been in the market for a long time and have good records
- Work with a lawyer. Everything should be done in the most legal manner.
- Read all of the contracts presented to you before signing anything. This is not something to be lazy about.
- Avoid looking for real estate online.
Craigslist is probably notorious for scamming a lot of people, not the website itself but the people who actually post in it. The problem with this website is that there’s no way of screening which person is telling the truth or which ones are out to get you. If you are looking for a place to rent or buy, then this might not be the best place to look for one. Real estate scammers are abundant on Craigslist, in fact there are so many cases where people lose a lot of money trying to look for a house.
Like the case of the girl in Bridgeport looking to rent a house, she responded to a Craigslist ad where she coordinated with the supposed home owner. She then sent $1,400 through Moneygram and was expecting to get the key to the apartment in the mail. Of course, the key never came. Rental scams like this is very popular and happens everyday. So be extra careful when looking for a home. Make sure that you do not send money, pay in person when you are already holding the keys to the house, never before that.
There are different fraud and scams on real estate that are now prevalent throughout the world. The rate in fact is embarrassingly high and people are losing millions of dollars. Though there are numerous effort to stop this, there are still so many people getting scammed each day. Most fraud takes place in the mortgage application process. It can be done using fake identification, misrepresentation of facts, fabrication of important details such as employment history or credit reports. All of these are crimes and when caugh can be penalized or even imprisoned.
To fight fraud, one must be careful when dealing with real estate. If you are planning on purchasing, then a lot of research should be done prior. There are a lot of fake agents trying to scam people for money. Make sure that when talking to agents, you ask for all information regarding the company they are working for, and check for identification. You must also ask to talk to other people they have worked with. If for some reason, they can not provide the information you need; then move on. There are so many real estate agents out there and you will land the right one with patience and research.
When people talk about Favela, it normally means rival gangs fighting turf wars in shanty towns of Brazil. Now, in what seems like a complete 360, it’s now a piece of prime real estate for European investors! The Rio de Janeiro’s Favela has been off limits to other people due it’s notorious reputation of drug trafficking. This past few years though, it is in the process of having a major overhaul. The police has now taken control and the transformation has been amazing so far. Though the rental price has gone very high, it is still taken advantage of by wealthy buyers. Ever real estate companies are opening offices. It’s very easy to do this because this place is a real estate gold mine! It has breathtaking views and nowadays, it is also clearly one of the most fashionable neighborhood in Rio. It has been quite busy with people battling to get a property but it has removed all of the gangs that has tainted the image of this once favela.
In Las Vegas, a former real estate agent was found guilty for participation in a real estate fraud scheme. Linda Marie Knot who schemed people that netted more than $10 million was sentenced by Judge Kent J. Dawson to serve a total of 70 months in prison, An additional 5 years of supervised release plus a $3.9 million forfeiture. The scheme was simple but very effective. It happened 6 years ago and it involved 13 new homes. Kot caused material misstatements to be placed on loan applications, so she can make large commissions. Kot had three other co-conspirators, Hugo Coutelin, Jeff Thomas and Michael Perry. They all plead guilty for scheming. Coutelin and Perry were each sentenced to 15 months in prison. Thomas was sentenced to the time he had already served.
This incident should serve as warning to people who are in the process/considering to buy real estate. Scams are done everyday without being noticed so take extra precaution.
Almost everyone in the home-buying process is engaged in fraud -the original buyer, the brokers, the appraisers, the title company workers, the straw buyers.
Appraisers – The best line of defense to combat real estate fraud.
Lenders – Usually the injured party of real estate fraud cases.
“Straw Buyers” – are loan candidates who perpetrators use to get hold of home loans, but who usually don’t intend to occupy the properties they’re buying.
There are so many greedy, conniving people in this world that you always have to be extra careful so that you don’t get cheated. Specially when it comes to investments. Some people can be gullible and trustworthy and they end up in a tight spot. So, do not allow yourself to be a victim. Here are some things you need to think of before you give your full trust to a person.
Make sure that you know every single detail about the person and company you are dealing with. Do a lot of research! ASK EVERY QUESTION POSSIBLE. Do not be embarrassed to do this. Every customer has the right. Ask for an NBI clearance and General Information Sheet to check the credibility of the real estate company. Also, make sure you get your own lawyer in on it too. Everything has got to be written down and made legal.
We all know how big subprime lending in the real estate market has led to the economic turmoil in the US and its impact on the rest of the world. Sadly, the unscrupulous practices of lenders and investment banks are not the only worries of a home buyer. Instead, there are plenty of real estate fraudsters still out there, as If the recent crackdowns on real estate scams are not scaring them away.
If you are looking to buy a home, make sure that you always double check the figures. It is imperative that you never take the seller’s word for it when it comes to appraisals, because inflated prices are how most homebuyers get sucked into bad deals. Get an independent appraiser to find out if the price quoted to you is realistic, and make sure you don’t end up committing mortgage fraud inadvertently by agreeing to under the table deals and not disclosing it in the official paperwork.
Doing just these two things will go a long way to helping you avoid mortgage and real estate fraud, but make sure you are as thorough and unrelenting in your research as you would be when surfing job sites for job openings so you don’t end up missing anything important.
Image via Debbie Small