Real Estate Fraud Issues Is it a Win Win or a Scam? March 2009 Lately we have reviewed a number of transactions that real estate agents or real estate companies were concerned about. On one hand, they looked at the transaction as a “win win” for everyone, on the other hand, something concerned them enough to contact us. The truth is it is hard to say no to a transaction that will put money in your pocket and food on the table. Everyone has to be careful that this truth does not blind them from seeing the transaction for what it may be: a high risk transaction that may be construed as fraud which will expose you to lawsuits, regulatory sanctions and criminal charges.... Click here to read the rest of the article. Desperate People in Troubled Times A disturbing byproduct of these difficult times is the length to which desperate people will go to escape a bad situation.  If a fight becomes desperate the Marquis of Queensbury rules seem sometimes to be forgotten.  On the “paper” side we’ve seen an increase in forgeries, including leases, liens and lien waivers, and even court-pleadings.  On the practical side, we’ve seen an increase in dissipated assets, including fraudulent conveyances of property, to keep assets out of reach of creditors – usually in anticipation of bankruptcy. Read more to learn about different fraud scenario's and the consequences if you are caught. Short Sale Fraud Schemes on FBI Radar November 2009  The FBI website provides a great deal of information regarding real estate fraud.   It lists Minnesota as one of the states with the rate of fraud, and shows Minnesota to be located in a region that has the second most ongoing investigations in the country.  In one section they describe various forms of real estate fraud that they recognize and are actively investigating, one of which is short sale fraud that I wrote about in the October update.  The following is from the FBI site:.   "Short sale fraud schemes continue to be used in combination with foreclosure rescue schemes in an effort to victimize homeowners and financial institutions (see Appendix A for an explanation of a short sale scheme).  Perpetrators across the country are recruiting real estate agents and paying them referral fees for locating and soliciting homeowners undergoing foreclosure.  Homeowners are entering into agreements with perpetrators deeding their property to them in the form of a land trust.  The homeowner is listed as the beneficiary of the trust and the real estate agent is listed as the trustor.  The perpetrators then negotiate a short sale with the lender.  After the short sale, the real estate agent sells the property for a profit to another previously identified buyer, but the lender and the homeowner do not know this.  In effect, the perpetrator sells the property for less than the mortgage and re-sells the property, often the next day, for a profit. " There are of course many forms of short sale fraud and, like all fraud, will continue to mutate so that those who are active in the fraudulent activity can argue that some change that they have made in the scheme somehow makes the transaction legal.... To read the rest of this article click here Mortgage Foreclosures:  Equity Stripping October 2006 Last month we wrote about mortgage foreclosures. This month we discuss equity stripping. Equity stripping has become so prevalent in Minnesota that the Minnesota legislature enacted a new law (MN Statute Section 325N) in 2004 in direct response to the problem. The statute has two basic targets: one, purchasers who buy property in foreclosure and as a part of the deal promise to sell the property back to the homeowner , and, two, the person who promises to help the homeowner in foreclosure save the property, stop the foreclosure or save the homeowner’s credit rating along with other similar services. It is the second target that will be the focus of this article since many real estate agents unknowingly fall into this part of the statute....  To read the rest of this article click here