Posts Tagged ‘real estate fraud’

Protect Yourself From Real Estate Fraud

Wednesday, March 30th, 2011

IRS reports that real estate fraud investigations have increased. When the housing market flourished a few years ago, it has greatly affected the rise of phony real estate schemes. As stated by IRS, mortgage brokers are usually the ones who are responsible for these schemes for the main reason that they want to make a fast buck with drug dealers who are just laundering their money. As a result, low income familes are struggling with paying their mortgage, lenders are left shouldering inflated mortgages, and investors are swindled out of their investments 

In 2008 alone, the damage caused by the 63,173 mortgage fraud suspicious activity reports was $1.5 billion. As of 2009, there were 40,901 suspicious activity reports and among these 2,440 were pending FBI mortgage fraud investigations, as of April 2009. The Treasury Department received 62,000 reports of mortgage fraud, which is more than 5,000 each month as President Obama noted that last year.

Given the increase in mortgage fraud and other real estate scams, surely you might have thought if it’s safer to buy, sell, or even invest in Real Estate in Mesa this year. But there are still some investors who are not actually afraid to go on investing because they are prepared to protect their investments from real estate fraud. Knowledge is so far the best defense against real estate fraud. To gradually eliminate fraud in the real estate industry, it is wise that everybody must be informed with some of the common schemes seen by IRS criminal investigators.

1. Properly Flipping – Buying an asset and quickly reselling (or “flipping”) it for profit. While in some cases, this practice is legal but there are some borrowers who make up false statements just to be approved.

2. Fraudulent Qualifications – This is done by fabricating a buyer’s employment history or credit record to qualify for a loan or so.

3. Two Sets of Settlement Statements – describes this scheme as “The fraudster gives the seller a real copy of the settlement statement, indicating the real price of the property. S/he then creates a fake one and submits to the lender. Except if the lender yields, the excess is split among the connivers.”

However old the methods mentioned above are there are still some who fall into their trap. Fraudsters, on the other hand, have to adopt to the changing environment especially now that there schemes are already known to the people. Again, knowledge is power.  Simple, yet effective in protecting your Homes For Sale in Mckinney Texas, as well as your future.