Short Sale Fraud Rising, Freddie Mac Wants Your Help

Unfortunately, there’s been an increase of fraud in the real estate world!  For more information read about it HERE .

Be aware of any unusual happenings, and find tips to help prevent short sale frauds’ continuous rise!

The Fed: Coming to a Theater Near You

The Federal Reserve is taking over the big screen, showing ads at movie theaters that warn against foreclosure fraud.

The spots will run in 14 cities with high-foreclosure rates and an abundance of financial scam artists who often result.

The ads last 30 seconds and feature photos of individuals and families. They open with the question, “Are you facing foreclosure?” and close with the reassurance, “It shouldn’t hurt to get help!” Before the fade, there are foreclosure tips.

“Everyone goes to the movies at some point,” says Sandra Braunstein, director of the Fed’s Division of Consumer and Community Affairs “The more attention we can put on this, the more consumers can protect themselves from scam artists.”

Source: The Wall Street Journal, Sudeep Reddy (03/27/2009)

Foreclosure Rescue Scams on the Rise

Foreclosure rescue scams, in which con artists prey on struggling home owners, are becoming more of a problem, according to the Federal Trade Commission.The FTC has already filed three major foreclosure rescue cases this year, compared with zero a year ago; and one case involves thousands of victims and property worth millions of dollars, according to FTC regional director Brad Elbein, who heads the agency’s foreclosure rescue campaign.

Some scammers promise to negotiate with a lender for a fee, then just take the money and run. In other cases, home owners pay rent to live in the house but sign title to a rescue company that is supposed to pay the mortgage. Instead, the company sells the house, taking whatever equity is left.

At least 14 states have passed new laws this year to protect home owners, including a new one in Idaho that requires a written contract with a rescue company and gives homeowners five days to change their minds.

“The scope is probably going to be potentially as large as the mortgage fraud problem itself,” says Sharon Ormsby, the FBI’s chief of financial crimes.

Source: USA Today, Donna Leinwand (08/04/ 08

Squatters Get Comfy in Abandoned Houses

Squatters are moving into foreclosed homes and posing as tenants so they can live in comfort until the bank either goes through the eviction process or bribes them to leave.

In a process known as “cash for key,” the squatters call the bank and boldly ask for money in order to move.

“There are people who move in and know exactly who to contact and say, ‘If you want this house, why don’t you come out here and offer me cash,'” says Detective Erin Camphouse of the Los Angeles Police Department’s Real Estate Fraud Unit.

“It’s just cheaper for the banks to do that rather than going into the courts,” she says. “The squatters are getting sophisticated and turning it on these banks who own the properties.”

California real-estate practitioner Steve Smallson says he finds about three squatting cases a month, compared to none all of last year, in his region of Woodland Hills, a middle-class district of Los Angeles. That includes a case in April involving a foreclosed home worth $1 million where police were called after neighbors reported squatters filming pornography in the house.

Source: Reuters News, Jason Szep (0518/)

Real Estate News:Immigrants Often Targets of Subprime Scams

Immigrants Often Targets of Subprime Scams

Immigrants have long been victims of fraud, but the subprime mortgage boom has provided a particularly popular avenue for unethical lenders to take advantage of immigrants.

Housing counselors say they have seen predatory lending to immigrants across the U.S. Among the vulnerable groups: Latinos throughout California, Caribbean and African borrowers in the New York area, and Russian immigrants in Philadelphia.

Immigrants with limited English skills tend to be trusting, especially when people with roots in their own countries offer them what appear to be good opportunities and easy money, says Katrina Vizinau, a counselor at Community Housing Development Corp. in New York City.

Source: The Wall Street Journal, Jonathan Karp, Miriam Jordan (12/06/2007)