LAKE HAVASU CITY PROPERTIES ON REAL ESTATE
COMMON MORTGAGE FRAUD SCHEMES
Property
Flipping - Property is purchased, falsely appraised at a higher value,
and then quickly sold. What makes property illegal is that the
appraisal information is fraudulent. The schemes typically involve one
or more of the following: fraudulent appraisals, doctored loan
documentation, inflating buyer income, etc. Kickbacks to buyers,
investors, property/loan brokers, appraisers, title company employees
are common in this scheme. A home worth $20,000 may be appraised for
$80,000 or higher in this type of scheme.
Silent
Second - The buyer of a property borrows the down payment from the
seller through the issuance of a non-disclosed second mortgage. The
primary lender believes the borrower has invested his own money in the
down payment, when in fact, it is borrowed. The second mortgage may not
be recorded to further conceal its status from the primary lender.
Nominee
Loans/Straw Buyers- The identity of the borrower is concealed through
the use of a nominee who allows the borrower to use the nominee's name
and credit history to apply for a loan.
Fictitious/Stolen
Identity - A fictitious/stolen identity may be used on the loan
application. The applicant may be involved in an identity theft scheme:
the applicant's name, personal identifying information and credit
history are used without the true person's knowledge.
Inflated
Appraisals - An appraiser acts in collusion with a borrower and
provides a misleading appraisal report to the lender. The report
inaccurately states an inflated property value.
Foreclosure
Schemes - The perpetrator identifies homeowners who are at risk of
defaulting on loans or whose houses are already in foreclosure.
Perpetrators mislead the homeowners into believing that they can save
their homes in exchange for a transfer of the deed and up-front fees.
The perpetrator profits from these schemes by remortgaging the property
or pocketing fees paid by the homeowner.
Equity
Skimming - An investor may use a straw buyer, false income documents,
and false credit reports, to obtain a mortgage loan in the straw
buyer's name. Subsequent to closing, the straw buyer signs the property
over to the investor in a quit claim deed which relinquishes all rights
to the property and provides no guaranty to title. The investor does
not make any mortgage payments and rents the property until foreclosure
takes place several months later.
Air
Loans - This is a non-existent property loan where there is usually no
collateral. An example of an air loan would be where a broker invents
borrowers and properties, establishes accounts for payments, and
maintains custodial accounts for escrows. They may set up an office
with a bank of telephones, each one used as the employer, appraiser,
credit agency, etc., for verification purposes.
Stay safe, for buying or selling real estate deal with a licensed professional like Dean Baker the For buying or selling real estate in Lake Havasu City, call Dean Baker Owner/Broker Lake Havasu City Properties, 16 years experience, over 600 homes sold in Lake Havasu.
Cell phone 928-486-3368or (888) 854-7210.