It's hard to imagine, but there are others who seek to take advantage of people's inexperience in real estate purchases. The mortgage fraud industry is much bigger than you may imagine, and thousands of people fall prey to overpriced homes, above-average interest rates, and loan sums that are much beyond their means every year. How can you tell if someone is trying to fleece you? Here are some pointers to assist you to see through the deception even though it's not as simple as you might believe.
In the first place, go with your instincts. You will need to work with a dishonest real estate agent who leads you to a piece of property, then an appraiser who will overvalue the property, and finally a bank officer who will confirm that price in order for this scam to be successful. Your gut should occasionally alert you to a problem given the number of dishonest people there. Keep your eyes peeled, and if something seems off (like the property they want you to purchase), start asking questions.
Watch out for scams that prey on the elderly, like this one. They tend to be more dependable than younger individuals and they believe what people say. These frauds have also been known to prey on novice buyers who are unsure of how such transactions should proceed. Additionally, you are more likely to encounter one of these con artists if you reside in Illinois, Florida, California, Nevada, or Arizona.
So how can you safeguard yourself? Here are some red flags to watch out for. Simply refuse if your real estate broker insists that you utilize a specific lender (i.e., the lender who is complicit in the scam). Inform your broker that you'll work with whichever lender you choose, that you looked around, and that you've settled on a different one. If this makes your broker or agent a little irritable, you might want to think about firing them.
If your lender is attempting to convince you to borrow more money than your budget will allow, this is another telltale sign that you're dealing with dishonest people. Never, ever, ever do this.
Knowing your specific boundaries should be your starting point in any conversation with your lender.
Make sure you acquire copies of everything you sign, even if this one should go without saying. If you don't, make a demand. Additionally, take the documents to another lender or to an attorney to have them reviewed if you believe you have signed something that is not entirely truthful.
As long as there have been Florida swamplands or Brooklyn bridges to sell, there have been con artists in the real estate industry. You must arm yourself with the skills necessary to cope with them because they won't be going anywhere (other than perhaps to prison).