Your guide to real estate fraud

Mortgage Fraud

March 26th, 2015 Posted in Detection, News, Real Estate Fraud | Comments Off

There are 2 type of mortgage fraud.

  • Fraud to get a property
  • Fraud to make a profit

The first is were someone lies about facts to get a loan to buy a property.
The second is where someone lies about facts to make a profit.

Fraud is committed by falsifications in the following ways:

1. Loan application fraud. Where an applicant lies about their income or their job. Perhaps the down payment they are making was given to them by the person selling them the home and the value of the home inflated to cover it.

2. Exaggerated appraisals. Appraisal is an art, not a science. Who can really be sure just how much a better view, or a swimming pool (for example) adds to the value of the property? The buyer wants the house, the seller wants to sell the house, the real estate broker wants to make the commission, the mortgage broker wants to make a commission. There is a lot of pressure on that appraiser to massage the figures a little to create a value that makes all these people happy.

Not to mention the possibility that a crooked appraiser could be in league with a crooked seller or borrower to give appraisals that are grossly exaggerated.

3. Falsified or fake credit reports. It’s really not that hard to use modern technology to “clean up” a credit report by copying it and “losing” some bad stuff.

4. False income. Applications can give the phone number, not of the company where the person supposedly works, but of a friend. The answer, look up the phone number of the employer in the white pages. Listen out for tell tale sounds, like children in the background in a supposed office setting.

5. Forged tax returns. Easy enough to fake using products like TurboTax ® etc. The answer, ask the borrower to sign Form 4506 and get a copy direct from the IRS. Click here for a copy for form 4506.

6. Fake title insurance.


Fraud Repellant

March 19th, 2015 Posted in Information | No Comments »


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.


Foreclosure Rescue Scam

March 12th, 2015 Posted in Scams | Comments Off

You’ve probably seen advertisements for foreclosure rescue specialists claiming that they can save your home and if it sounds too good to be true, it probably is. They might appear to be totally sympathetic, but they’re only there to get the title away from you. So-called foreclosure rescue specialists will ask you to sign a warranty deed, quitclaim deed, grant deed, or other sorts of property deeds while making promises that they will be unable to fulfill. Read the rest of this entry »

Who Is Involved?

March 5th, 2015 Posted in Real Estate | Comments Off

b2.jpgAlmost 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.

– 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.

How To Avoid Real Estate Fraud (part 2)

February 26th, 2015 Posted in Detection, News, Real Estate Fraud | Comments Off

How To Avoid Real Estate Fraud

Other Red Flags

While the above “red flags” are frequently used there are many other indicators that you need to be aware of:

“Rebates” on Sales Price
“Rebates” on Broker’s Fee
Overly Inflated Sales Prices

Land Flips
Commission Based on a Sales Rice
Amended Contract to lower Than What is in Contract
Reflect New Purchaser

Multiple Transactions Between Agreements to be Performed

A “Friendly” Appraiser Affiliated Parties “Outside or After Closing”

The use of Inappropriate Comparables (mixed use vs. commercial zoning, urban vs. rural)

Increased Value as a Result of renovations with High Dollar Soft Costs (architect fees, engineering fees, consulting fees, management fees) vs. Hard Costs


Epidemic Case

February 19th, 2015 Posted in News | Comments Off

b4.jpgMortgage Fraud is truly an epidemic. It may sound like a physically powerful word, but after bearing in mind the most recent figures on real estate fraud and foreclosures, you may feel the word quite strong enough. The Mortgage and Real Estate Industry is driving down the same road back then. It’s alive and well because of willful blindness.

Real estate fraud lair

February 12th, 2015 Posted in Victims | Comments Off
grinning man
Because they desperately want to buy their own house, they fall in the lair.

Let’s face it. The boom in real estate market has made fraud and fake estate plans very tempting to perpetrators who dream of getting rich at any expense and lawbreakers who want to camouflage their crime proceeds in another setting have likewise thrown their hats in the ring.

Victims of real estate fraud are mostly families with income falling under low brackets, who get attracted to get housing loans they can hardly afford. The perpetrator’s common trick here is to offer the poor victims loan agreements that give “great deals” which supposedly will immensely “benefit” the borrowers. However, unknown to the victims, there are undisclosed shady deals lurking under the provisions of the contract.

Cash back at Closing

February 5th, 2015 Posted in Detection, Information, News, Real Estate Fraud | Comments Off

cashbackThough the action or ploy has been ruled out as illegal for a long time but people simply cannot resist the promise of cash when they do closing deal. The promise of a win-win situation for all concerned is the main bait for such fraudulent activities which is just too good to be true, it often is. The crook can be any of the many players in the home sale game, from the buyer, seller, agent, loan officer and even the lender and the victims can also be either of these individuals. The situation has a seller being called upon by a prospective buyer who gets a loan at a higher rate that what the home is actually worth. Read the rest of this entry »

Bit of good news

January 29th, 2015 Posted in News | Comments Off
man reading newspaper
Here’s a bit of good news to homeowners from Washington. There will be partial refunds for those who gave payments as security for their homes at the brink of foreclosure. A statement from the Washington Attorney General’s Office has been recently released to concerned homeowners that those who paid between one thousand two hundred dollars and one thousand five hundred dollars to Foreclosure Assistance Solutions LLC of Clearwater, Florida.

In his statement, State’s Attorney General Rob McKenna said the FAS (Foreclosure Assistance Solutions acted arbitrarily when they coerced to compel the homeowners to pay for an oppressively priced service. McKenna said the FAS failed to deliver the service it promised to the homeowners.

Protect Yourself

January 22nd, 2015 Posted in Detection, Real Estate Fraud | Comments Off

An important step in protecting yourself from real estate fraud is safeguarding personal information.

  • Safeguard personal information until you know who you are dealing with, how it will be used and if it will be shared with anyone.
  • Keep personal information confidential when on the phone or Internet until you know who you are dealing with.
  • Carry minimal information or identification in your wallet.
  • Inspect your credit reports on a regular basis. These can be provided free of charge by the credit reporting agencies. If you notice anything suspicious, contact the credit bureau with your concerns. Visit the websites listed at the end of this brochure for information on contacting the credit bureaus.
  • Inspect your financial or bank statements monthly for inconsistencies or unknown charges.
  • Protect the integrity of your mail. Make deliveries to and from the mail slots in person. Access your mail at regular intervals, ideally every day.
  • Destroy financial or identification documents before discarding them.
  • Destroy any unsolicited credit card applications that you may receive. Stay alert for other signs of identity theft or real estate fraud, such as:
  • Failing to receive bills or other mail. Follow up with creditors if your bills don’t arrive on time. A missing bill could mean an identity thief has taken over your account and changed your billing address to cover their tracks.
  • Receiving credit cards that you didn’t apply for.
  • Failing to receive credit cards you did apply for.
  • Source