Authorities in Lansing, Michigan recently advised home buyers to beware of a Craig’s List home selling scam where scam artists meet potential home buyers at a home they do not actually own and take payments from the buyer. This scam is operating across the country and is not limited to properties in Lansing Michigan. (It is also being perpetrated against potential renters who are “rented” homes that are not owned by the scammers.)
In the Craig’s List scams, a home buyer can generally protect themselves by depositing the earnest money with their own real estate agent or with an escrow company rather than handing money over to the scammers. The fact that the scammers don’t actually own the property will be discovered during the title search that is conducted while the sales transaction is pending.
This is not the only scam that involves fake sales. In another common scam, fake sellers actually forge quit claim deeds and ‘transfer’ the property to themselves. Sometimes these scammers also rent the property from the real owners so that they can ‘show’ the property to potential buyers.
Looking at current ownership in these fake sales transactions may not be enough. Home buyers and real estate professionals also need to look at the last transactions recorded against title to the property. If the property has recently transferred by way of quit clam deed, a little more due diligence may be in order before handing over the earnest money deposit or purchasing the property. It is as easy as contacting the “prior” record title holder – who may not even be aware that their property has been transferred. Quit claim transfers are not always fraudulent. And fake transfer can be done by way of regular grant deeds. We just see more fake transfers by quit claim.
In the Craig’s List scam, the fake sellers walk away with the earnest money deposit or down payment. In a fake sales transaction, if it is not detected by the title company, the scammers walk away with the entire purchase price.
If a homeowner falls for one of these fake sales transactions and purchases a property that doesn’t actually belong to the seller and was transferred by way of a forged deed, the new homeowner’s only real recourse will be their title insurance policy.
Jonathan Lyons, 53, a former sales representative at a company purporting to provide mortgage modification services, Rockville Center, New York, pled guilty in Manhattan federal court for his role in a multimillion-dollar scheme that victimized more than 500 financially struggling homeowners across the country. Lyons, who was arrested in October 2013, pled guilty before U.S. District Judge George B. Daniels.
According to the allegations contained in the Indictment and related Informations, the plea agreements, and statements made in court proceedings: Continue Reading…
Shayne Harrison Smith, 47, Myrtle Beach, South Carolina entered a guilty plea in federal court in Florence, South Carolina, to Wire Fraud, a violation of 18 U.S.C. § 1343 in connection with a loan modification fraud scheme. Continue Reading…