The company Local Records Office has been in the real estate game for along time and has seen many types of scams; from bad deed scams, foreclosure schemes, loan documentation fraud to letters being sent to new homebuyers scam. In 2020 scammers have gotten very creative with their craft. Even with online complaints and bad reviews, these companies continue to do their dirty work, remember that scam artists will do anything possible to get quick cash, that’s why homebuyers need to be on their “A-game”.
Local Records Office created tips on how to spot and avoid online scams and fraud that want to steal homeowners’ hard-earned money.
Real Estate Scam and Fraud: #1 – Foreclosure Rescue Hoax
Due to the 2008 real estate housing bubble, many homeowners lost their homes to foreclosures and high-interest rates. The scam artists knew that homeowners who were in foreclosure proceedings would do anything in their power to keep their home so they would promise homeowners that they will save their home for an upfront fee, the perpetrators would obtain a new loan on behalf of the homeowner or by having the homeowner sign over the home’s deed and then rent the home until they can repurchase it. Unfortunately, many people fell into this scam.
Most of the time with these types of foreclosure programs the homeowners would have to sign over the home’s deed to a third party company, the homeowners will become renters on their own home and eventually losing the home.
Real Estate Scam and Fraud: #2 – Bad Home Flipping
In this scam home, investors buy worn down homes that have been abandoned for many years or have severe water damage and repair them with extremely cheap material that only last a few months and would eventually cost the homeowners more money to fix the home than to buy it. In most cases, the home’s foundation would be so damaged that the mold and water damage would cause the residents health problems. The only thing the investors would do is paint over the mold or put drywall, since they want the biggest profit possible the results wouldn’t even pass inspection.
Real Estate Scam and Fraud: #3 – Loan Documentation Fraud
The scammers provide fake and or fraudulent paperwork to qualify for a lower loan. The scam artist would have an income too high or no employer’s address. In many of these cases, the con artist would apply for many loans and just rent the property out.
Scam and fraud is nothing new in real estate but over the past decade, con artists have gotten extremely smart. They go to many extremes to get loans and home titles.
Real Estate Scam and Fraud: #4 – Title Fraud
This scam is not as common but it’s one of the easiest and more dangerous scams. This particular scam involves identity theft, the thieve will pose as the homeowners and take out a new mortgage on the property. After a secure loan, the con can take the money left at the real homeowner’s expense.
Real Estate Scam and Fraud: #5 – Loan Modification
A loan modification is one of the most common scams since the scammer could do it at the ease of his or her home. The con artist will call the homeowners and say they are calling from an agency and that the home is in foreclosure, the caller will suggest that the homeowner has few options, one being reduced mortgage payments all for the low price of a fee or access to some sort of bank information.
Why Don’t Many Real Estate Scammers Get Caught?
Many scam artists don’t get caught because they use fraudulent documentation to do their dirty work from the beginning or online. Others use legit but stolen documentation and just change the picture on the driver’s license or identification card.
Other scam artists are illegal aliens who are not in the system so there’s no way to track them down. Real estate scams are a serious problem in the United States, when homeowners see a deal that sounds “too good to be true” it probably is “too good to be true”. Make sure to do your homework and research on how scam artists are scamming new homeowners.