Real Estate Fraud Red Flags

fraud

Today I spent 3 hours in class over at the Kansas City Regional Association of REALTORs.  It’s a required class and mostly review.  But I did like that the handout had these following red flags:

  • Assurances not to worry about the appraisal.
  • Silent Second Mortgages, Texas Earnest Money (i.e. a seller carry-back that is forgiven at closing).
  • Promises to the buyer that the property will be leased or rented in behalf of the buyer and the loan payments, insurance, etc. will be covered.
  • A new immigrant is told to use someone else’s social security number.
  • Certain items are omitted from the HUD-1 closing statement.
  • Advance down payment amounts which are falsely represented as being paid by the borrower.
  • Quit claim the property back to seller or co-conspirator without notice to or permission from the lender.
  • Resubmission of the listing to MLS for a higher list price so it will coincide with the inflated contract.
  • There are an unusual number of addenda to the purchase contract.
  • Last minute invoices are submitted to the closing agent.
  • Unusual expenses are paid by the seller, such as large repair charges, and/or charitable donations.
  • Lenders or mortgage broker not willing to commit something to writing.
  • Mortgage broker does not want real estate professional to contact lender or investor to alleviate concerns.

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Filed under Misc. Real Estate, Personal Real Estate Opinions

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