Home ownership is the American dream, and it is shared by many right here in Santa Cruz. But there is no lack of people who would take that dream away from you through a variety of schemes. To safeguard yourself from real estate fraud, you need to know what to look for; here are some common schemes.
The Riverside County District Attorney’s Office explains that identity theft and forgery are two types of real property crimes and can include forged grant deeds and phony, or “straw” buyers. New home buyers are also at risk from forgers who send fake escrow instructions in hopes of diverting deposits to their own account.
In addition to these, real estate identity theft has become a problem. By assuming the real owner’s identity, a thief can obtain title to the property. The next step is stealing the equity by borrowing against the property or selling it outright. Older homeowners are a typical target of this type of theft.
To add insult to injury, some prey on homeowners who are struggling financially. These criminals may seem to be valid brokers or consultants, but they are only after your money. Their schemes include phantom help, bait-and-switches and title transfers.
Phantom help is typically someone offering to help homeowners with paperwork or phone calls and charging exorbitant fees. They may do some of the easy work, which the homeowner could also do, but little more, despite promising to work at saving the home.
A bait-and-switch is when schemers try to get homeowners to sign paperwork for a new loan. What they are asked to sign, however, is the deed to their property.
A similar scam is a title transfer that is usually presented as a bailout. Owners are told that it is a temporary transfer or that someone with better credit can get better financing. In all circumstances, the owner is assured they will be able to buy back the home. Unfortunately, the terms of the buyback are typically impossible to meet.
The best protection a homeowner has is skepticism. You should check out an agent or company with the Better Business Bureau or ask to speak with clients. Ask for referrals from friends and neighbors. Above all, do not sign documents that you do not understand or that you are pressured to sign. Have a reputable expert examine all documents.
This article contains general information on real estate fraud. As such, it should not replace the counsel of an attorney.
