Monday, August 13, 2007

Bank Fraud

I received a call today from a person we'll call "Joe". Joe asked me if I had any pocket listings (not in the MLS) in the Sherman Oaks area that his clients can buy at below market value. I asked him for more specifics, and here is what Joe said... Let's say that you have a seller who is thinking of selling a Sherman oaks home soon (Keep in mind the home is not listed in the MLS). Let's say the true market value of the home is 550K and the seller will accept an offer at $500,000 without having to pay fee's resulting from selling the home the tradition way (escrow, agent, title, etc..).

Then Joe went on to say that he has an appraiser who will most likely appraise the property at $600,000. The additional $100,000 ($600,000 - $500,000) would be refunded back the the buyer at the close of escrow. Joe said that he would make his money (doing the loan) and I would make my money (representing the buyer).

I asked Joe if he was going to disclose the $100,000 buyer-credit to the lender. He said yes. He said everything would be done through escrow and we would not be breaking the law.

I asked Joe if he was aware that his actions constitute bank fraud. Confused, he said no and wondered why it would be considered so. I explained that I strongly doubt any bank would lend money to a buyer knowing that the seller was crediting the buyer $100,000 through escrow.

It's obvious Joe and his crooked friends were trying to swindle a large amount of money from the bank and cause financial damage to the neighborhood. I also guarantee that the Sherman Oaks home would most likely have ended up in foreclosure. This would have caused homes in the neighborhood to lose market value as that foreclosure would most likely be sold at a steep discount.

If you are thinking of selling your home or already have your Sherman Oaks home on the market, working with an Sherman Oaks real estate professional makes a world of difference.

Here is a post about how swindlers prey on people:
Foreclosure Rescue Scams - Don't Fall Prey!

Another article for those people who can't pay their mortgage:

Written by: Richard Johnston, RE/MAX OTB Estates
Sherman Oaks Real Estate Specialist

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