Mortgage Fraud Series #4

This is the fourth in a series of posts about mortgage fraud and how we can protect ourselves from it. There are two kinds of markets that seem to attract scammers the most. The first is a hot Seller’s market when prices are rising fast. Scammers find it easy to inflate appraisals and strip properties of equity. The second is a Buyer’s market where prices are declining and sellers are frightened. Scammers prey on these sellers, sometimes drawing them into a mortgage fraud scheme.

The previous posts covered foreclosure rescue, forgery, and phantom buyers. This post is about plain ole LYING and three scenarios of fraud.

1. Lying about selling the home, again. The scammer buys a property and then contracts to sell the property to numerous unsuspecting buyers. The multiple transactions are closed within a very short span of time. The scammer takes the money and disappears. This scam works because of the time it takes to record a deed at the courthouse. A property can be sold several times to unsuspecting buyers during the lag time it takes for the recorded deed to appear.

2. Lying on the No-Lien Affidavit. I can remember on more than one occasion the Title Company sending me a final settlement statement that accidentally missed a home equity loan owed by the seller. If such a seller went to closing and saw they were going to receive a lot more money than they were entitled to, they might be tempted to sign the settlement statement and take the check. The problem is the seller signs a document affirming that no other liens exist. They just committed a felony by doing so.

3. Lying about Marital Status. There have been cases where a husband or wife sold the property without the other’s knowledge. Another form of this is when a couple is about to split up and one of them takes out a home equity loan without the other’s knowledge and keeps the money. In Florida, sale or mortgage of homesteaded property requires joinder of spouse, regardless of whether or not that spouse is “on the title.” Failure of such is fraud.

Please contact me, Dan Forbes, a call if you have questions about or our Bradenton, Florida real estate market at 941-746-0505; toll free 877-646-8326.  Visit my web site BradentonFloridaRealEstate.com

Mortgage Fraud Series #3 

Forgery is one of the oldest forms of real estate fraud.  Today’s sophisticated copy equipment makes it even easier for Freddy the Forger to pull off his scheme. Forgery is a part of many mortgage fraud schemes.

There are Two common types of forgery:

1. Forged satisfactions.  A common fraud is to forge the satisfaction of a mortgage while continuing to pay the monthly payments.  After forging the satisfaction the property owner will obtain a new mortgage and take cash out of the property. The forger then skips town with the cash.  

2. Forged deed to self.  This is the classic forgery situation and involves assuming the identity of a property owner to convey the property to themselves for resale or mortgage. 

Indicators are recent deed, usually a quit claim deed and minimal doc stamps on the recent deed. Forgers aren’t smart enough to pay the proper doc stamps.  In their greed they leave a clue.  This scam targets vacant property and property which is held free and clear with no prior mortgage.

Identity Theft. The Forger assumes the property owner’s identity to mortgage the property and take the cash.  By assuming the identity of the true owner of property an imposter can mortgage the property and cash out the equity.  This requires forged identity documents.  Indicators may include:

• Vacant property.
• Large amount of equity in the property.
• Proceeds delivered in unusual fashion (wired to offshore bank, cashiers check to cash, proceeds to third party)
• Large transaction coming from unexpected source

Please contact me, Dan Forbes, a call if you have questions about or our Bradenton, Florida real estate market at 941-746-0505; toll free 877-646-8326.  Visit my web site BradentonFloridaRealEstate.com

Mortgage Fraud Series #2

I am writing a series of posts about mortgage fraud and how we can protect ourselves from it. Fraud thrives in two kinds of market. The first is a hot market when prices are rising fast. Scammers find it easy to inflate appraisals and strip properties of equity.  The second is a declining market, where sellers are frightened.  Scammers play on these sellers, sometimes drawing them into a mortgage fraud scheme.

The Phantom Buyer 

By increasing numbers, people are receiving notices of default on their mortgage. However they are alleging they did not purchase or mortgage the subject property. In many cases it is revealed that the identity and credit score, of the person was assumed by another.  They have fallen into the Phantom Buyer scheme.

These transactions often take one of two forms:

1. Seller creates a phantom buyer.  In this scenario the Seller will inflate the value of the property and will offer an accomplice a sum of money to impersonate a person with good credit. They enter into a bogus contract and close at the inflated price.

Sometimes a mortgage broker is involved. The broker may use the identity and credit of a real person whose offer on another property did not close. 

2. Third party creates a phantom buyer. In this scenario a Seller is offering a property for sale and a buyer offers to pay more than asking price if settlement includes payments for unperformed services or unrecorded mortgages. The Buyer takes title in the name of an individual with good credit. The Seller doesn’t realize he has been involved in a scheme to defraud the lender.

Most Phantom Buyer schemes do not happen in transactions involving a Realtor. However, in today’s world, Realtors may never meet the Buyer face to face.  Transactions can be conducted by email or overnight packages. Therefore, it is important that Realtors KNOW their Buyers and Sellers.  Otherwise the Realtor may find himself/herself drawn unwittingly into the scheme.

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Please contact me, Dan Forbes, a call if you have questions about or our Bradenton, Florida real estate market at 941-746-0505; toll free 877-646-8326.  Visit my web site BradentonFloridaRealEstate.com and my blog The Real Estate ZOO.

Mortgage Fraud Series #1

Bradenton Buyers and Sellers must be careful about falling into a senario that perpetuates mortgage fraud.  I am writing a series of posts about various mortgage fraud scams.

Foreclosure Rescue Scam
One common type of fraud being committed today is regarding Foreclosure Rescue. Some unscrupulous individuals are taking advantage of desperate sellers facing foreclosure steal any equity in the borrower’s property.

A “white knight” will contact desperate homeowners whose mortgages are in foreclosure.  The homeowner is usually presented with an offer to refinance their home at a reduced interest rate or extended payment period.  The homeowner will sign papers they believe will lead to a refinance.  The documents are actually a conveyance of the property.  The scammer will try to market the home for sale before the foreclosure is complete or obtain a second mortgage by misrepresenting the value of the property.  In this type of fraud the individuals committing the fraud will usually obtain the signatures of the homeowner and produce the documents at closing.

If you are a homeowner facing possible foreclosure you need to know that when a Notice of Default is filed in the public records you will be contacted by many people.  Some are investors looking for a good deal. Some are foreclosure rescue businesses that prey on those in trouble.  Some want you to pay them money in order for them to help you. DON’T FALL FOR IT.

If someone approaches you and offers you a deal that seems too good to be true it probably is.  Speak with your attorney.  Call an experienced Realtor.  By all means, ask for advice.

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Please contact me, Dan Forbes, a call if you have questions about or our Bradenton, Florida real estate market at 941-746-0505; toll free 877-646-8326.  Visit my web site BradentonFloridaRealEstate.com and my blog The Real Estate ZOO.