May 9, 2011
Real Estate Fraud
Did you know that real estate fraud existed? If you are a current or future home owner, it is important to know the risks which you are exposed to. First, you must know that there are two types of fraud which you could be victim of. In both instances, the consequences are major: the victims can suffer a significant financial loss, and in the worst case scenario, they could lose their home.
The title fraud begins with identity theft. The criminal can get the information he needs to steal your identity in many ways: looking through your dumpsters, stealing your mail, or by computer hacking. Once he has the information, he can use your identity to assume the title of your property. He can then sell the house or get a new mortgage and once it is done, he disappears with the money. Over all, the worst part is that the victim may never know about the fraud until the mortgage lender calls concerning mortgage payments he has not made or until the new owner shows up at the door claiming to own the place.
The second possible fraud is less common. It happens as part of a legal process called foreclosure. This process is established to help an owner who is unable to make his mortgage payments. He can call upon a mortgage lender who will take possession of the house and sell it to cover the debt. In these cases, a criminal will offer the owner to lend him money to cover his expenses and consolidate loans in exchange for an agreement to transfer the property title. Once it’s done, the criminal may keep the victim’s payments without paying back the debts. He may also sell the house or get another mortgage and then disappear with the money. Unfortunately, in all these scenarios, the victim may end up on the street with debts he has no way of repaying.
As most fraud begins with identity theft, the best advice we can give is to protect your personal information. It is wise to never give your personal information to people you don’t know. Also, shred all documents with your personal information on it, protect yourself from mailbox theft and order a copy of your credit report every year to see if all the information is accurate. In doing this, you will be able to quickly discover if someone is using your identity. To prevent foreclosure fraud, you should, if you have problems with your mortgage payments, contact your mortgage lender first. Also, should you need to transfer your property title, you are best to consult a lawyer. He would be the best person to help you with this. Finally, you can look into getting title insurance which will cover losses related to title fraud.
It is best to inform yourself about all these security measures. As the old saying goes: Better safe than sorry!