More fraud red flags
Summer is here and while you’re sitting on the beach you might not want to think about real estate fraud, but fraudsters may be thinking about you. Over the past few weeks, we’ve gone over different kinds of real estate fraud, but there’s more – lots more.
Deed fraud is something most people don’t even think about. How can someone get a lender to give them money against the equity of your home or indeed take over your identity? It might be easier than you think.
There are many identity theft monitoring subscriptions you can purchase that will alert you if there is a new credit check on your credit report or a new loan or credit card. I have one of these and it is very effective, if occasionally annoying, especially if your credit card has an unusual charge which you know about. Nevertheless, I, for one, think it’s a good investment.
The one thing that may be more difficult to be alerted about is deed fraud, another form of identity theft. Deed fraud occurs when someone steals your identity, forges your name on a deed and takes title to your home. This can be more difficult than it sounds to sort out even if you know about it quickly.
Every state has different regulations on executing a deed of sale, but a sure way to check to see if your deed has been tampered with, especially if you have reason to believe this is the case, is to search Manatee County property records. This is a simple and quick process that involves just entering your name and finding your property records. You will see immediately if the deed has been transferred to someone else just like when you sell or buy a property. It’s a nice little habit to get into once a month considering that identity theft is on the rise.
Another popular fraud is wire fraud starting with scammers checking online multiple listings. They wait for a pending sale then profile as many parties to the transaction as they can and research email addresses. When you purchase or sell a property these days, most of the transaction is done online. With so many people involved in the transaction, there is sensitive paperwork flying around the internet. It’s easy for even the most trusted person to make a mistake or not check details, leaving that up to you as the buyer or seller. Look over everything carefully, don’t just do your online signature and move on to the next page.
There are red flags to look for before you sign off and these are just a few of a long list: deletions, corrections or other alterations; someone other than the seller is shown on the sales contract; purchase price is substantially higher or lower than current market value; date and amount of existing encumbrances appear suspicious; real estate commission is excessive; chain of title includes an unknown interested party or the buyer and seller have similar names but haven’t disclosed a relationship.
Finally, you can keep up with scams by logging on to the FBI or the Financial Fraud Enforcement Task Force websites if you are suspicious of something related to your transaction or by emails you received online. Don’t open any emails that look official unless you’re positive it’s legitimate.
There are many anti-fraud acts enacted by states and the federal government. The most well-known one is the Dodd-Frank Act enacted in July 2010 as a result of the prior financial crisis. This act places regulation of the financial industry in the hands of the government to limit risk and enhance transparency. However, don’t assume everyone involved in a real estate transaction or an existing deed is competent and honest. As a homeowner and potential homeowner, you need to be proactive.
This may not be your favorite beach reading, but it is important.
