Stop Fraud

Characteristics of fraud for profit?

  • No intent to pay
  • Inflated property value
  • Multiple falsified documents
  • Quick closing
  • Difficul to detect complex schemes

Fraud for profit schemes

  • Straw borrowers
  • Flipping the property
  • Oklahoma scheme
  • Churning
  • Covenant take over
  • Equity Skimming

Straw borrower is an individual who acts as a borrower in a loan transactioon who does not intent to reside in the property. Examples: Parents/ Non-permanent residents/ ID theft Victims

Flips, Oklahoma Schemes and Churning

  • Flips: selling the property shortly after purchase for an inflated value
  • Oklahoma schemes: multiple sales in quick succession to inflate value of the property 
  • Churning: involves a group of individuals in the same neighborhood, selling properties to each other, inflating values, reselling the properties and churning values

It's fraud for profit

  • Step 1 - a fraudulent sale of on the property is registered, and the owner's existing mortgage is discharged
  • Step 2 - New Mortgaga obtained, funds advanced, less mortgaga fees and land transfer taxes = net profit

What is Equity skimming?

  • The skimmer offers to :
  • assume the monthly payments
  • promise to remove the victim's name from the mortgage loan
  • promise to take title to the property
  • What do they really do?
  • obtain secondary financing and place tenants in property
  • skim the rent and fail to make monthly payments
  • fail to register a title transfer

Red Flag: Sale of present home

Watch for:

  • an unexecuted offer, with no sign-backs
  • changes to the purchase price not initialed
  • the copy of the solicitor's ledger shows math errors or altered figures
  • the property cannot be found on mis.caand it was not a private sale