The recent boom and bust in the real estate industry has created many opportunities for scam artists to make quick and easy money, while leaving their victims wondering what happened. Real estate fraud has been a problem for decades, however, it typically increases in markets that recently have experienced problems and people are desperately looking and hoping for solutions.
I recently heard of scam that appears to be gaining popularity in the real estate industry. The scam artist, will first prey on people that are having a tough time making their mortgage payment or facing foreclosure and promises to handle their problems if they quit claim the title of the house to them (the home owner relinquishes their ownership of the property). They tell their victims that they will refinance the house in their name or handle the sale of their house so they don't have to deal with the headache and can salvage their credit.
Once the scam artists takes over ownership of the property, they then advertise the property for rent, or even better for them, as a lease option to buy. Once they have tenant, they collect a deposit (on a lease option the deposit could be as much as $10,000) and rents, but never make a payment on the house or try to sale the property. By the time the original owner or tenants discover what has happened they scam artist has collected their money (up to $15,000 in some cases) and has disappeared. The original owner is now stuck with a mortgage that is in foreclosure and has no options to save their property and the tenants are out their deposit and are forced to find a new place to live.
How do you avoid falling victim to a similar scam? First you have to know the people that work these scams are good and very convincing. They will provide you will a deed to shown they own the house, and it's almost impossible for the common person to know who is on the note of the mortgage. However, there are few easy steps you can take to protect yourself.
First, always ask to contact their other tenants for a referral, any good landlord or business person will have no problem providing this information.
Next, check county records to determine how long they have owned the property and how they acquired the house. Almost every county has this information online through the assessor's office or property records. If they acquired the property through a quit claim deed, there is a good chance that they are not responsible for the mortgage and it should raise red flags.
Another good idea (especially for lease options), is to have the deposit held by a non-interested 3rd party, such as a title company. If some thing does happen you will be able to get your earnest money back from the title company.
If you are doing business with a stranger, remain skeptical throughout the process, make them earn your trust, and don't be a afraid to ask for help from some one with in the industry. Feel free to call us and we will take them time to review the transaction and provide any advice that might help.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/
http://www.myprosperityfinancial.com/
Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates
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