Real estate fraud doesn’t target everyone equally, experts say. Instead, it is most often aimed at people in foreclosure, homeowners with low income levels, and the elderly. Below are three examples of real estate fraud that could target these groups.
Foreclosure rescue scams
This scam is not too complicated. A “lender” says that the best way for a homeowner to save his or her house from foreclosure is to sign the deed over to that lender on a short-term basis. The lender then promises to help get the house out of foreclosure and transfer it back. Instead, after it’s been signed over for free, the lender just sells the house.
Equity skimming scams
These scams use inflated home values. For example, if a home is listed for $200,000, a buyer may tell the seller to take it off the market and put it back on for $400,000. The buyer will then have an easier time getting the $400,000 mortgage, but he or she will still only pay $200,000 for the house, stealing the rest of the money and letting the bank foreclose on the house.
Illegal flipping scams
This is a difficult scam for some people to understand, since flipping a home is legal. However, illegal flipping usually involves massively inflated values. Legal flipping just means buying an under-priced home, fixing it up, and then selling it for the true value. Sometimes, people are accused of illegal flipping when they didn’t know they were doing anything wrong.
Those who have been charged with white collar real estate crimes in Maryland have the right to a fair trial.
Source: American Bar, “Real Estate Fraud 101,” Youshea A. Berry, accessed Nov. 23, 2015