Beware the Latest Short Sale Scams
May 13, 2010 by Tom Schieber
Filed under Blog, Featured Posts, Short Sales
If you are a distressed homeowner considering a short sale, beware of new fraudulent schemes that could land you in a much more tenuous situation than you probably ever imagined. Agents and investors looking to play every possible angle in this market, are coming up with not-so-new schemes to defraud the banks and take advantage of their short sale processes, as well as desperate homeowners.
Here are some tips, things to look out for:
- If an agent offers you a short sale in which you are going to be allowed to stay in your property as a renter, with or without the option to re-purchase your house at a later date – be very cautious.
- If you are told (or suspect) that your short sale listing is not listed on MLS, or that not all offers are being presented – ask some questions.
- If you are told by your real estate agent that they have an “all-cash” investor who is willing to buy your house short – beware.
- If there are additional payments being made at the closing that are not on the HUD-1 settlement statement - raise an objection.
- If there is any part of your agreement with the Buyer, the Agent, the lender, appraiser or title company that is not being fully disclosed to the lender who is taking the short payoff – you may be involved in a short sale scam.
Like most of these sorts of deceitful practices, these new short sale scams seem harmless, and are easily justified by the homeowner who feels like they’ve been cornered by the lender, with few good options left. And some of these “omissions” or side-deals seem to be victimless crimes (like lying on the loan application). Just be aware, if it sounds too good to be true, it probably is.
My advice: Get some good advice. Talk to more than one professional when you are considering your options. Talk to an attorney for sure (I know a reputable RE attorney who will do a consult for a very reasonable flat fee). Don’t do anything that could come back to haunt you!
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