Mortgage Fraud Short Sale Schemes
Short sale fraud schemes are used in combination with foreclosure rescue schemes to steal from homeowners and financial institutions.
How it works:
Real estate agents are paid referral fees by the perpetrators for locating and soliciting homeowners undergoing foreclosure.
The homeowner enters into an agreement with the perpetrators deeding their property to them in the form of a land trust. The homeowner is listed as the beneficiary of the trust and the real estate agent is listed as the trustor.
The perpetrators then negotiate a short sale with the lender. When the short sale is completed the real estate agent sells the property to another previously identified buyer for a profit but neither the homeowner nor the lender know about it.
The property is bought for less than the mortgage owed and then re sold, often the next day, for a profit.
Example:
Connecticut real estate agents charged with engaging in short sale mortgage fraud
Information for this series was gathered from mortgage fraud blog, the FBI 2008 fraud report and the IRS.
Home loans since 1977
First Priority Financial is licensed by the California DRE # 654852 Nevin's California DRE license 016552
The opinions expressed in this blog are not necessarily those of First Priority Financial.
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Nevin: This kind of stuff is nuts. What happens is that sellers are so frustrated and desperate that they cling onto any hope that something will work out for them. That, I believe, is why they are easily convinced to go along with this scheme.
Unfortunately, people make "not so smart" decisions when they are desperate. It's a total shame that these types of things are going on and I am so glad that you are posting this series for us in the business and especially, for the consumers. I am looking forward to part 4.
Melissa - Hi there! I would agree. Sad that industry professionals would knowingly try to do something like this. This is why they need a short sale expert on their side. Your experience is more likely to notice this type of activity and prevent it!
Hi Amy! - Desperate times cause desperate measures and sometimes this chagrin clouds peoples judgement. I dug up all of this stuff and learned a lot in the process. I appreciate your comments and I hope members of AR and cunsumers learn from this as well. Thanks for stopping by!
Part three in your series is, unfortunately, a lot more rampant than most people know about. Great job informing everyone about this type of fraud.
Hey Craig - It amazes me that these types of scenarios are increasing even after all that has happened to our industry. Thanks buddy!
This is such an important series Nevin! THank you for taking the time to put it together and contributing to my blog!
Thanks, Nevin! This is an awesome series and I know that I am learning quite a bit! This one, Part III, is a VERY sad and disturbing trend - thanks for getting this info out for everyone to be better informed!
Renee - I thought it would be a cool subject. Thanks for stopping by and thanks for letting me share it on your outside blog!
Leesa - Thanks! More to come...