$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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Fraud Watch: Real Estate Scams and the Millennial Home Shopper

According to the Federal Trade Commission, tech-savvy folks aged 40 and under are far from immune to scams and frauds. And most scams that hook them begin in an email. And the coronavirus economy is creating even more opportunities for fraud risk.

Image of a person looking nervously at a computer. Captioned: Real Estate Scams and the Millennial Home Shopper

A bogus email can appear to be a message from an ecommerce or business site, or even from the government. Millennials are twice as likely as people age 40 and older to report falling for a scam while browsing messages or social media posts and clicking on one of the advertisements. There are phony giveaways, the sale of tickets to fake events, and undelivered or counterfeit items. Young adults are also the targets of education, employment, and investment scams.

Some of these tricks can be life-changing. While online shopping fraud might involve just a few hundred dollars or less, millennials also face real estate scams, such as organized wire fraud and mortgage relief ploys.

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Real Estate Law Enforcement: Catching Up to Deed Fraudsters

Silhouette of a person running with a briefcase. Captioned: Real Estate Law Enforcement Catching Up to Deed Fraudsters

Some years back, the state of Georgia, under the Georgia Code (GA § 44-2-43), made stealing houses by recording fraudulent or counterfeit real estate deeds a felony, incurring 1-10 years in prison. Witnesses who help perpetrate Georgia deed fraud are subject to the same potential penalties. 

Georgia is not alone in its resolve. The FBI reports that real estate fraud ranks among the fastest-growing U.S. crime categories. Now, laws are catching up to the fraudsters, deed recorders are starting to alert people to filings on their homes, and cities are helping people confront the con artists.

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Elders and Real Estate Fraud: A Burgeoning Problem

Image of an elder couple sitting on a park bench with their backs to us and a tree filled parked in the foreground. Captioned: Elders and Real Estate Fraud

Evelio and Milagros Esteban are in their 70s and they’ve been homeowners for years. But recently they ran into trouble paying their mortgage. That was when they mistakenly transferred their home deed to another Miami resident, who offered to help them rent out their home. Thinking they were signing a Section 8 housing application — which would help them rent out space affordably to low-income people — they in fact signed a quitclaim deed.

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Viral Fraud: More Deed Crime Targets in the Coronavirus Economy

Well-known schemes are being repackaged for the time of COVID-19. Here’s an overview of how real estate fraudsters are approaching their targets — and how to avoid becoming one.

Image of an open lock hanging on a closed door latch.

Scams flare up during natural disasters and financial crises, so we can expect a spike in deed fraud in 2020 and beyond. Battered by the pandemic, facing snowballing debts and possible defaults, many people are now considering risks they would have rejected in the past. Deed fraudsters can be counted on in times like these to aggressively seek new opportunities.

Any wiring directions or changes to money transfer requests over the phone or by email should arouse suspicion today. Rather than act or answer, recipients should call the company and deal with a real person. And rather than use phone numbers supplied in messages, recipients should take the extra step of visiting the company’s website, copying the published number, and calling that number. Personal details should be volunteered only after the identity of the party making the request if verified, or by physically going to the company’s office.

Of course, COVID-19 itself is making in-person meetings less possible or at least less palatable. Part of the fraud risk involves the way online transmission of our personal and financial data can be so easily and rapidly handled.   

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The Quitclaim Deed and Fraudulent Real Estate Transactions

Image of a safe fashioned in the shape of a house with hand reaching to open- article discussing quitclaim deeds and their role in fraudulent real estate transactions.

Quitclaim deeds show up commonly in fraudulent real estate transactions. This type of deed fraud can impact elderly people, buyers purchasing real estate from strangers without warranty, renters who are paying someone who is not a legitimate owner, and anyone involved who might buy, sell, or own property.

Here, we examine how it happens and how to detect it.

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