California Real Estate Fraud Report

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03
Oct

DRE Reports Sharp Increase in Short Sale Fraud

Mortgage fraud in the early 2000s was fueled by profitable subprime loans, the lure of fat commissions for loan officers and the frenzy by large investor groups such as hedge funds to purchase mortgages loans which had been bundled and securitized for their purchase.

Welcome to 2010: short sale fraud is the fraud du jour and this time the big pay-offs go to crooked real estate agents who often submit a low value for the property for which they sometimes have an undisclosed relationship with the buyer, and represent the buyer as well as the borrower who is short-selling his or her property. Often there is a kick-back to the borrower (illegal) following the sale and the agent re-sells the property shortly afterward, making the spread on the resale as well as the real estate commission representing the new “seller”.

The California Department of Real Estate (DRE) reports that while there were only ten complaints of possible short sale fraud to them last year, now there are over 100. I would bet that many of the complaints are filed by buyers and their agents who made a superior offer on the property that was never submitted to the distressed seller or his/her lender by the seller’s agent.

Read the full article in Business Wire.

© Copyright 2007-2018 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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