Guide to Real Estate Fraud

House Stealing

The FBI has released information regarding this rather uncommon crime wherein you, the homeowner can get your home (not the contents) stolen right under your nose without you even knowing about it. Called House Stealing, it has a crook assuming your identity through theft and transfers/sells your property legally.

As the FBI says, it is not easy to stop such a crime so vigilance is the key. How would you feel if you suddenly get an eviction notice saying that the new owner of your house needs you out of there, without even considering selling your home? This is a serious crime and should be treated with utter vigilance for cases are increasing and you are the best defense. Victims are cautioned to contact the FBI or other concerned law enforcement agencies for more information and help.

親和性詐欺に気をつけて

最近では世界中に多数の宗教グループが存在します。 これらの地域のグループは信頼、信条、愛などを共有し、お互いを助け合う努力をします。 残念なことに、時々この信頼は同士を騙し、盗みを働く無節操な人間に利用されます。 ある人間が自分の宗教グループでの地位を利用し、投資家との信頼を築くことを不動産用語で親和性詐欺と呼びます。 このような悪事の責任を持つ者は、通常グループ内で高い地位を誇るか、尊敬されています。 多数の投資家が何百万ドルという金額を騙し取られるため、親和性詐欺は個人やグループ全体に非常に破壊的です。 ほとんどの投資家が普通の労働者で信頼を失ったばかりか、一生涯の蓄えも失うため、特に悲劇的といえるでしょう。

“Rescue Companies” 2

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The Illinois Attorney General further warned the public of the “title taking scheme”. Con artists would persuade homeowners(especially the older ones) to sign the title of their home over to them, the home rescue fraud scammers, who will then sign it back to them (the owners) after their credit is repaired or after the home’s value increases. Of course, by the time they realize what is axtually going one, they have already lost everything. The Illinois Attorney General has offered her services to prevent homeowners from having their homes foreclosed. Her office has provided the public with a list of counseling centers where homeowners are given a step by step guide to prevent foreclosure to their home and a website where consumers can access her Mortgage Rescue Fraud Brochure. Finally, she implored consumers to do away with “mortgage rescue” companies but instead use the helpline her office provided to prevent the occurrence of fraudulent mortgage-related transactions.

Multi-Level Marketing in Real Estate

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These days “fraudsters” are becoming more inventive. One type of real estate fraud is done by a supposedly “new” multi-level marketing company. In countries that are “havens” of networking companies,this is especially true and it works like a magnet for retirees, overseas workers, anybody who wants to have their own house and lot, housewives, practically anybody who wants to earn big, and those who have savings and are looking for a business to put their hard earned money into. These companies would attract people with a ready networking group, whose members are each willing to invest a considerable amount of money, telling them that for every recruit , they reach a certain sales level position in the company, and they will also earn from the cash investments of their recruit up to the nth degree PLUS the PLUM, which is their “dream home”. This is where fraud sets in. If the networker has not done his homework, meaning the company was not given a thorough background check as to its company history including its affiliates, reliability, credibility and capability to deliver products (actual houses that are already built and ready for occupancy), then they could be in for a shock and total disappointment not to mention the loss of their investment, because there is no actual house and lot that will be given.These companies usually develop tie ups with developers/building contractors to show prospective investors that they have the capability to build houses. However, the usual scenario is that the networking company uses the people’s investment to finance their other businesses, a method which creates an adverse effect. Eventually, a number of investors have fulfilled all the requirements for them to be entitled to their “dream home” but it (the house) can’t be built and given to those entitled to it yet because there is actually no money that can be used to do so. The recruit’s dream home remained just that – a dream!

Beware of Affinity Fraud

There are a lot of religious communities in the world today. These local communities, that share ties of trust, belief and love, will usually go out of their way to help and cooperate with one another. Unfortunately, this trust is also used by unscrupulous individuals to con and steal from their fellow men. In real estate terms, it’s called affinity fraud, where someone uses their position in a religious community to build faith with investors. The people responsible for such scams are usually people who have a high-standing, or are looked up to and respected in their community. Affinity fraud is very devastating to the individual and to the whole community, oftentimes, because of the large number of investors, resulting in hundreds of millions of dollars scammed. This is especially tragic in light of the fact that most investors are regular workers, who may have lost not only their trust, but also their life-savings.

Be cautious of the Real Estate fraud

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Be cautious of any real estate frauds, since many people are venturing nowadays onto these illegal matters just to earn quick money. Some things to watch out for are those real estate industry professionals who conduct 100 percent of their business on a cell phone on the road. Upstanding real estate industry professionals almost always have an official office and telephone line. Verify these information’s through checking the licenses of the real estate agencies in a state, county or city regulatory agencies. Make sure that you are conducting your business transactions at either the real estate professionals’ office or in a bank. Doing this gives you a further opportunity to verify the agent or the broker’s professional standing, as well as alleviates pressure you may feel if someone is strong- arming you inside your own home. And make sure that the name on any documents you are going to sign matches the name of your own personal identification cards.

For Real

The flourishing real estate market has helped increase mortgage fraud and other spurious real estate related schemes. The perpetrators of these system range from mortgage brokers to drug dealers laundering their ill-gotten gains. Each year, these deceitful schemes abuse individuals and businesses from many walks of life, including low-income families enticed into home loans they can’t afford.

The Ponzi Scheme

A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going.

The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. However, the scheme is often interrupted by legal authorities before it collapses, because a Ponzi scheme is suspected and/or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi was not the first to invent such a scheme, but his operation took in so much money that it was the first to become known throughout the United States. Today’s schemes are often considerably more sophisticated than Ponzi’s, although the underlying formula is quite similar and the principle behind every Ponzi scheme is to exploit lapses in judgment arising from investor naïveté.

Flipping Houses

Flipping houses is not illegal if it’s done in an ethical manner. House flipping occurs when a house is bought then sold for a profit after several months or years. Sometimes the house gets renovated before the resale to increase its value. Illegal house flipping is a form of real estate fraud. This is when the seller provides misleading information about the value of the property to earn a profit. This also includes falsifying tax receipts or bribing an appraiser so that the house is appraised at a value higher than what it is actually worth. Covering up any defects of the house to the buyers and lenders is also a part of illegal house flippping.

Flipping houses is legal as long as there is no fraud statements made in the contract. If you are buying a flipped house, make sure that the contract does not have any false statements.

Spotting Renter’s Fraud

Landlords who become victims or renter’s fraud lose thousands in rent and damages. Fraud occuprs when the facts landlords rely on to give up their legal right to the property are false or deceptive. When a renter applies to rent a unit, the landlord grants some sort of credit to the renter. Fraudalent applications usually have common characteristics that landlords should be wary off.

Unusual name arrangements or names of known personalities like Tiger Woods.
Unusual job titles like lion tamer or if the salary is out of range for the job.
Social security number is omitted or mismatched.
Bank account numbers are omitted, or credit references come from unknown companies.
Use of P.O. box addresses for references
First four digits of the credit card do not match with the bank’s tax ID number.