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Wire fraud and other real estate cons

On Behalf of | Feb 1, 2023 | Real Estate Law & Litigation

Real estate is one of the largest investments or transactions that individuals engage in. But, according to the FBI, there were over 11,578 cases of reported real estate or rental fraud in 2021. Knowing about these schemes can help you protect your real estate law and litigation rights.

Wire fraud

This typically occurs when you receive a phone call or text from an alleged title or escrow company with directions on where to wire your escrow funds. Scammers create fake websites that look identical to a title or lending company you are working with. They use spoofing tactics to make phone numbers, websites and email addresses seem familiar. The fraudsters then withdraw the funds for an offshore account.

Loan flipping

A predatory lender convinces a homeowner to refinance their mortgage multiple times, and more money is borrowed each time. Fraudsters charge high fees and points with each transaction. Homeowners have higher loan payments after borrowing most of their home’s equity.

Work only with reputable banks or lenders. Be wary of lenders who seek you out although you did not ask for their help. Review loan estimates and closing costs carefully.

Foreclosure relief

Unscrupulous actors use public records of homes in foreclosure to offer foreclosure relief. This comes with a costly upfront fee. Scammers often claim affiliation with the government or public housing assistance programs. They often advise that you should not talk to your lender.

Instead, work directly with your loan servicer to modify an existing loan, ask for forbearance, or make other arrangements. HUD-accredited housing counselors may provide guidance.

Fake listings

Fake property rental advertisements often appear on social media which sometimes use photographs from other listings. They have no connection to the property or owner but will ask for an upfront payment to view the property or hold it as a deposit.

Renters should learn about potential schemes, research the property, and get written details of the transaction. Be wary of anyone who ask for a cash deposit to see a property and assure you are dealing with the property owner though a local property appraiser’s website.

Always pay with a check and avoid telephone transactions.

Insist on speaking with the property owner before signing a contract or making a payment. Take a picture of the license of anyone claiming to be a real estate agent.

Attorneys can assist you in real estate transactions. They can help assure that your rights are protected under California law.