Want to Invest in Real Estate? Look Out for Influencers and Ponzi Schemes

The U.S. Securities and Exchange Commission (SEC) has caught up with Ohio’s “Cash Flow King” Matt Motil. The online influencer defrauded people out of millions of dollars in what amounts to a Ponzi scheme, officials allege.

He used popular social media sites. He also touted the investment opportunities at issue on Biggerpockets.com. Motil advertised that he was empowering people worldwide to create massive wealth, the SEC alleges.

Motil, who promised people their rental estate investments would pay off hugely, for “a lifestyle you actually love,” filed for bankruptcy last March. But wriggling out of the multi-million dollar case hasn’t been so easy.

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“Hustle Culture”: Is This the Trouble With the Housing Market?

Some people are fed up with the “hustlers” of the U.S. real estate market. They criticize celebrity investors such as Grant Cardone, the host of a podcast titled “This Is Not Your Daddy’s Economy,” accusing him of promoting a get-rich-quick philosophy that exposes small investors to extreme risk.but the

The hustle mentality in general, they say, is only worsening the everyday frustrations felt by hopeful home buyers in an exclusive housing market. And it takes advantage of those same frustrations.

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“Unlicensed Appraisal” and Other Stories: How Scam Artists Chase Disaster Victims

After Tropical Storm Hilary blasted the Baja and San Diego regions in mid-August, the Federal Trade Commission urged people to watch for a surge in rip-offs.

Opportunists may say they’re performing appraisals, but unless they are licensed appraisers, they lack professional accountability. If they’re improperly doing the work of adjusters, they might be violating state insurance law, too.

Their goal? To fleece people and then walk away from them in their time of need. Today’s climate realities offer schemers plenty of chances to rip people off.

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Look Out for These Bizarre Real Estate Listing Scams

Nationwide, real estate scams siphon hundreds of millions of hard-earned dollars into the accounts of fraudsters. Some new and unusual scams can fool real estate professionals.

Consider the use of AI by cutting-edge scammers. As the news show 60 Minutes recently noted, hackers now use artificial intelligence to copy someone’s voice, and have access to apps that change what comes up on a caller ID.

Here are a few hallmarks of scams that every home seeker or home lister should know. Keep in mind that tech-savvy scammers make these sneaky ploys all the harder to avoid or trace.

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Insurance Fraud: Homeowners Can Be Victims or Perpetrators

Whether it’s a homeowner’s title insurance policy, or a home/condo owner’s policy, no homeowner wants to be involved with apparent fraud.

The potential consequences are serious. Although most criminal and real estate laws are established by the states, insurance fraud can implicate federal charges, like wire fraud, mail fraud, forgery, impersonation, and conspiracy.

Let’s look at how fraud plays out. You might be surprised at how nervy some people can be.

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$199 Check From “County Deed Records”? Recognize Home Warranty Renewal Scams

Frauds and fakers commonly target homeowners for money. In one of the sleaziest schemes going on at the moment, a home warranty vendor is trying to get homeowners to sign up for its product.

What’s worse, the marketing letters don’t look like sales materials. They look like they come from the local recorder of deeds.

Counties in numerous states are warning their residents about these unsolicited and deceptive letters.

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Pennsylvania Sues Broker for Recording Sneaky Liens on Homes

The Harrisburg office of Attorney General Josh Shapiro recently announced a lawsuit against Amanda Zachman, founder of MV Realty, and the company itself. A.G. Shapiro slammed the company for misleading Pennsylvania homeowners with a so-called Homeowner Benefit Program and recording liens on homes without notice.

MV Realty charges an upfront payment in return for getting exclusive listing rights on homes for 40 years — in a deal which Pennsylvania’s highest legal officer has declared a scam.

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Notorious Jersey City Mortgage Fraudsters Face Justice

The office of the U.S. Department of Justice in the District of New Jersey recently made an announcement. Its investigation of a New Jersey mortgage fraud scheme is drawing to a successful close.

A Jersey City resident concocted a series of crimes. Over the course of the scheme, a trio of collaborators bought properties and received cash loans borrowed against property values — that is, home equity line of credit (HELOC) funds. The broader conspiracy involved $30 million in mortgage fraud. It netted the fraudsters hundreds of thousands of dollars over several years.

The mastermind is a real estate investor… and a licensed real estate agent.

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Here’s the Lowdown on Mortgage Fraud Today

Mortgage fraud involves a loan approval based on false statements or omissions. It can also involve getting some other kind of improper advantage from a lender through false statements — such as being allowed to make a reduced loan payoff, or make easier payments.

Mortgage applicants can commit fraud. So can home sellers. So can banks, appraisers, or insurers. Indications of fraud are present in about one of every 120 mortgages.

Loss of reputation, fines, prosecution and prison sentences are the potential consequences of mortgage fraud.

Here, we take a look at how it’s happening today.

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Fraud Update: Closing Scams Now Make Up Nearly Half of Cybercrime Losses

The word "Fraud" written in red ink on a piece of legal paper surrounded by some U.S. paper currency. Captioned: Closing Scams Now Make Up Nearly Half of Cybercrime Losses

What’s a closing scam? Consider the Colorado home buyer who, a few weeks back, opened an email from the title company. It contained precise instructions for wiring the closing money. The amount requested — about $80,000 — matched the amount the title company had already discussed. Everything looked legit.

Two days later, the title company was requesting the money. Why hadn’t it been received? Because those wiring instructions weren’t from the title company after all. Criminals had insinuated themselves into the company’s email accounts, impersonated the title agent, and diverted the funds.

When a buyer is stung by fraud, money is hard to get back, says the American Land Title Association (ALTA). This buyer was fortunate. Redfin’s Title Forward escrow and settlement subsidiary sprang into action. Title Forward brought in CertifID Funds Recovery Services and the Secret Service. The buyer recovered the 80K.

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