Monthly Archives: May 2017

Fraud in Real Estate

This paper is intentionally created to provide information about various related documents about real estate. It also discusses about the transfer of money related to the process in real estate. This could also lead to mortgage scams. The reason that this case is called a fraud is that fraud in real estate usually uses a guarantee application in the form of immovable objects or mortgages. Real estate scams can result in severe penalties such as fines and imprisonment.

Such crimes can be committed in various ways. This case will occur more often when property prices are on the rise. Because this case is simple, some cases can happen very easily in various cheats. Some cases can not occur due to more complicated procedure. One of the common forms of such fraud, according to the IRS is preparing two settlement statement sets that are different from each other. In one of the statements, the accurate property-selling price is written, which the buyer receives. The other one will depict a higher selling price that is exaggerated. When the mortgage lender approves the loan for the exaggerated price, the seller is given the amount that is stated in their copy of the settlement statement. The one who committed the fraudulent settlement statements will keep the money that is left over. If there are other conspirators, the money will be divided among them. It could be the entire excess money or a percentage of it.

Using the requirements mode is another type of fraud case in the real estate field. These fraudulent terms are used when applying for a mortgage or when the process of getting a loan for their mortgage. In the case of this scam usually a real estate agent will help the buyer. Incorrect qualifications are usually found when making credit reports. These two involve the obvious misrepresentation of data but not all real estate fraud is easy to see as these two examples. If buyers who do not intend to commit real estate fraud because they do not know the laws can accidentally commit mortgage fraud.

If the buyer has the money as a security deposit it is not a fraud. But if the warranty deemed as a gift is refunded to the person providing this guarantee is considered a case of fraud in real estate. A gift given in lieu of the advance is considered illegal. Another type of property fraud is when the buyer accidentally fails to disclose any financial liabilities on their mortgage application. It becomes fraud when it is not taken care of before the loan is approved. Property flipping can become real estate fraud if you make false representations about the value and condition of the property when you sell it for a much higher price than you paid for the property.