Real Estate Fraud

Real Estate Fraud: An OverviewReal estate fraud refers to illegal schemes involving deception in real estate transactions, property titles, financing, or ownership. It can target property buyers, sellers, lenders, or investors.

Common Types of Real Estate Fraud

1. Mortgage Fraud
   
   • Misrepresentation of income, assets, or property value to obtain a loan.
     
   • Examples:
     
     • Fake appraisals
       
     • Straw buyers
       
     • Income falsification
       
2. Title Fraud (Deed Fraud)
   
   • Criminals forge documents to transfer ownership of a property without the owner's knowledge.
     
   • Often targets vacant or fully paid-off properties.
     
3. Foreclosure Rescue Scams
   
   • Scammers target homeowners in distress, offering fake assistance and tricking them into signing over property or paying fees.
     
4. Rental Scams
   
   • Fraudsters pose as landlords, collecting deposits or rent for properties they don't own or have no right to lease.
     
5. Investment Fraud
   
   • Promoting fake real estate developments or schemes to lure investors into nonexistent or overvalued projects.
     
6. Equity Skimming
   
   • Using deceit to drain property equity, often involving straw buyers or fraudulent refinancing.
     
7. Wire Transfer Fraud (Business Email Compromise)
   
   • Hackers intercept transaction communications and redirect closing funds to fraudulent accounts.
     

How to Protect Yourself from Real Estate Fraud

• Verify property ownership through official public records.
  
• Use licensed professionals (real estate agents, attorneys, title companies).
  
• Review all documents carefully before signing.
  
• Be cautious of deals that seem "too good to be true."
  
• Confirm wire instructions directly by phone with your escrow officer (never trust email-only communication).
  
• Monitor your property title regularly, especially if it's vacant or mortgage-free.
  

What to Do If You're a Victim of Real Estate Fraud

• Report immediately to:
  
  • Local police or sheriff's office
    
  • State real estate licensing board
    
  • FBI (for major wire fraud, title theft, or mortgage fraud)
    
  • FTC (Federal Trade Commission)
    
• Contact a real estate attorney experienced in fraud cases.
  
• Notify your title insurance company, if applicable.