FlippingFrenzy.com, one of the more than 100 publications and blogs we feed into Chicago Real Estate News, published a story this morning about the new scams that mortgage fraudsters will employ this year.
According to the FBI and the Utah Division of Real Estate, who issue a joint annual report on real estate fraud, some sellers are taking advantage of the short sale process to bilk their banks.
The scam works this way: A bank will strike a deal with a homeowner who is facing foreclosure to sell the home for a lesser amount than is owed. The homeowner then negotiates a different price that allows them to pocket some of the money.
“The homeowner is part of the fraud,” Pickens said. “Say there’s $300,000 owed on a mortgage. The homeowner approaches the bank and says, ‘I can’t pay for the home, but I have someone who will pay $250,000 for it.’ ”
If the bank agrees, Pickens said, the homeowner then sells the home for a price in between the two figures, pocketing the difference without reporting it.