Common Scams with Real Estate Listings on Craigslist

Real estate mortgage scams are an illegal activity with the purpose of false representation of information on a mortgage loan application or other transfer of money related real estate documents. There are many ways in which real estate frauds are committed. Especially during times when the price of rent to own or homes for rent is on the rise.

This scam is probably one of the most common types of real estate Scams. In this type of fraud two different sets of settlement statements are prepared. One statement is given to the seller in which the accurate selling price of the property is reflected. The other statement that shows an overstated selling price is given to the mortgage lender. When the lender provides the loan in the larger amount, the excess is divided between the swindlers.

Foreclosure Scam:

People who are having problems paying their mortgage of their home are approached by someone who represents themselves as a mortgage consultant or a foreclosure service. The cheater offers to help these distressed homeowners and acquires the title or deed from the home owner.

Home equity Scam:

Some corrupt financial institutes may encourage the owner of a home to leverage himself beyond his means. It is known as home equity liquidation or collateral stripping: taking cash out of the equity in a home.

House Improvement Scam:

A person, or group, comes to your door and tells you that they’re working in the area today or offers to arrange a home-improvement loan to do work for you. Good and sound contractors don’t need to go door-to-door looking for business. These swindlers typically target the elderly with this scheme, and their work is typically sub-par at best. At times, they will leave before the job is actually done.

Loan servicing Scam:

Lack of complete documentation and terms provided by some lenders to their customers is becoming a growing problem for consumers. Lenders through a deceptive way of selling, advertise a rate to the buyers when they apply for the loan who are then pressured to switch to a more expensive rate to close the transaction. The buyer, who fears losing the loan, agrees to the new terms.

Mortgage Scam:

A distressing trend that is spreading sharply is the association of different real estate industry professionals like mortgage lenders, brokers, appraisers, and real estate agents who are carrying out the fraud. The most common scam is home appraisers who over inflate the value of homes to secure larger loans. Mortgage scams are rapidly increasing in the U.S due to rising prices of real estate and homes for rent.

Tax Avoidance Scam:

In this case when both parties; the seller and the buyer agree on a transaction, the seller of a property may wish to avoid tax or seemingly help buyers avoid tax by accepting deposits in hard cash. The buyer supplies his deposit of $500 which turns out to be fraud. The swindler moves around the common practice of declaring to the authorities’ only part of the sale price and paying the rest in cash. The extra payment is known as black money and it’s paid in a notary’s office when the sale documents are signed when the officials are gone.

Speak Your Mind