California Real Estate Fraud Report

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05
Jan

Buyers Find Themselves on the Losing End of Short Sale Fraud

Short sale fraud is in full bloom.

According to an article in the Modesto Bee, sometimes an “unscrupulous agent” will trick a lender into accepting a low-ball offer from the agent’s straw buyer, with the agent’s personal interest hidden in a limited liability corporation (LLC). The agent then resells the property a few months later to a buyer who had made a higher offer on the original sale but had been rejected.  

Here are two stories:

Nancy Bibeau Wright offered $170,000 (full price) for a Turlock house in March 2010 on a short sale. The home was foreclosed on in September and sold to an LLC for $153,000 which then resold the property for $199,900.

Buyer John Giltz was angry when a Patterson home he tried to buy in the summer of 2010 went to a buyer who offered less.

One sign of short sale fraud to buyers: the listing agent insists the buyers use him/her as their agent or their offer won’t be accepted. That is illegal and is done so that the agent can control and conceal any illegal activities in the transaction. Report the agent to his/her broker, their local Realtor® board and file a complaint with the California Department of Real Estate.

Read the full article in the Modesto Bee.

© Copyright 2007-2017 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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