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Due to the economy slowing down the Federal Reserve System has met and made two significant rate cuts: three-quarters of percentage point at an emergency meeting followed by a half a point eight days later in 2008. The Chairman of the Federal Reserve System, Ben Bernanke and Treasure Secretary, Henry Paulson is predicting the U.S. will avoid a recession. With the real estate market at a slow down I want to talk about real estate fraud schemes.
The first form of fraud is the foreclosure bailout. These homeowners or victims have negative equity, also known as "upside down" and owe more money on their home's mortgage than the home is worth. Their caught in a dire strait situation and must sell their home at a loss or let their mortgage company foreclose on their home. A so called "bailout specialist" offers the victim a short sale. In this form of fraud the homeowner will be told that for a 1,000 to 2,500 fee, they can deed their home to the bailout specialist and then rent it back. The bailout specialist takes the money, does not arrange the short sale and does not make any payments on the mortgage. The ending result is that victim is evicted, the home is foreclosed and the specialist makes money.
Use caution when using your home equity for a home improvement loan. Salespersons may offer to refinance your home at a lower interest rate to provide cash for home improvements or to pay off bills. Victims may be asked to sign blank contracts or not allowed time to read the contracts before they sign. Later, the homeowner discovers that terms have been changed, including the interest rate.
Thinking about renting? Con artists will rent out a home that they do not even own. They find a vacant abandoned house, enter the home to change the locks and put it up for rent. The con artist then collects the first and last months rent, with a security deposit. The con artist disappears with your money.
Timeshares is another deception that con artists use to swindle an unsuspecting victim. Con artists may make oral promises that are omitted from the written contract.
They may also fail to mention fees and obligations that are in the written contract, which are never mentioned orally. These misrepresentations might be discovered at the contract signing, however would be downplayed by the sales person as only "legal jargon".
Although fraud is not a physical injury, many victims of con artists suffer by great emotional harm by losing the following: Financial security, family home, business, inheritance,retirement savings, professional credibility.
If you have concerns about real estate deals, please seek a good real estate attorney before signing on the dotted line. If you feel you have been a victim of a crime contact your local law enforcement agency. Be safe, think smart and do not be a victim from con artists.