2012: The Big Year For Short Sales AND Frauds?
2012 is known to be the year for short sales especially with the Mortgage Forgiveness Debt Relief Act set to expire this year and lenders promptly approving short sale files. However, fraudulent activity is in lockstep with this increase in short sales and homeowners must beware of these scams this year.
HousingWire recently came out with a report stating, “The number of suspicious mortgage activity reports filed by financial institutions grew 31% to 92,028 in 2011 from 70,472 in the previous year, according to the Financial Crimes Enforcement Network.” These numbers are bound to increase in 2012 as pre-forclosure sales showed a 33% increase in January over year-ago figures in 32 states.
One recent FBI case in Los Angeles from KCAL9NEWS involved 3 indicted criminals who profited over 10 Million via fraud and identity theft. Targeting distressed homeowners, they used real or fake short sale real estate transactions and home loans. They claimed to have “have insiders working at the bank, who, in exchange for cash, would authorize short sales for far less than fair market value, according to court documents. At least twice, the defendants used short sale approval letters that had been entirely fabricated.”
The latest news for real estate fraud is on Matthew Wayne Stewart who had to surrender his license for collecting illegal profits from real estate transactions. After pleading guilty, he was sentenced to serve 90 days in jail as well as pay approximately $25,000, and be on formal probation for three years. The DRE (Department of Real Estate) is now posting alerts on their website so homeowners can be vigilant of these types of frauds.
Short sale fraud victims are on the rise around the nation. Make sure you are working with legitimate experts in your area and please refer to the Seattleshortsaleblog guideline on how to choose your agent.
Hope this helps