Learn Some Real Estate Fraud 101
Thursday Jan 28th, 2021Share
This article discusses some of the common real estate frauds in the industry that causes big financial loss.
Real estate fraud can be defined as unethical and misleading tactics that scammers use to trick home buyers, owners, or sellers out of their big-money or title.
Title fraud is when a scammer somehow gets a hold of a property title and then take a new or additional mortgage without the actual homeowner’s knowledge. This is usually committed after identity theft when the scammer is able to get a hold of the personal information of the title owner.
Mortgage fraud is a mortgage obtained through false information during the mortgage application. An unethical underwriter or broker accepts a fee to approve fraudulent income information for the approval of a higher mortgage to afford a property. This is termed as a “paperwork deal” which usually means the underwriter or broker gets about 1% cashback from the transaction.
Foreclosure fraud happens when you make a ‘temporarily’ transfer of your title to somebody to get you a loan to make payments when you are having a hard time paying your monthly mortgage. The scammers take your payments and other immediate legal fees and get your title to resell or take on another mortgage.
Fraudulent listings are created by some brokers from surrounding properties marked as sold on the MLS at inflated prices to encourage comparable sales. The listed fraud listings remain in the MLS and inflate market prices for years to come.
Online rental scams involve a scammer posting online ad listings of a rental property and then does not show up on showings due to being abroad and demands a quick wire transfer or online downpayment so they can send the interested renter a key to the rental after. The renter shows up on the property finding out the real rental owner or property not being rented at all.
The information on this post can hopefully educate home buyers, owners, and sellers to spot suspicious transactions and prevent them from becoming victims of scammers.
Empower yourselves with due diligence and reputable professional assistance during your home selling process. Consult with JoAnn Visaretis to help you address your real estate needs and questions and be assured of ethical and honest service.