‘Fraud’ is that one word you’d instead do without when making mighty transactions. And if we’re talking mighty, we’re talking real estate. Getting trapped in a real estate fraud is among the worst ways to lose large sums of money, and you end up not getting what you had paid for. Here’s what you need to do to avoid such trickery.
Identify Whose House It Is, Really
‘Title Fraud,’ also known as identity theft, is a property owner’s worst nightmare. Tricksters forge documents by changing the property owner’s details to match theirs. Once the property and all the documents are transferred to their name, they procure a new mortgage against this property and seal the deal. Taking back your house after that is quite a hassle. What if they sell your property?
In addition to thoroughly verifying who the property belongs to, you can opt for ‘title insurance, which protects your property title against fraud. This also guards a new owner against existing claims, such as unpaid property taxes, unpaid utilities, and unpaid mortgages.
Don’t Opt For Loans Offered In Disguise
a) Foreclosure Fraud
Cash-strapped property owners that can’t afford to meet mortgage payments sometimes get taken for a ride. Deceitful people offer to pay the loan on the owner’s behalf as if to help them out of the situation but then leave without fulfilling the promises. The trickery usually requires immediate payment for the trickster’s services and an agreement to transfer the property title to them. Once this is done, the trickster flees while you are left behind with piling amounts of debt and no property. This type of fraud is called foreclosure fraud.
b) Home-Equity Fraud
Watch out for those people who are eyeing your house equity. If you rely on your house equity to borrow money, you have to constantly be on the lookout for unscrupulous lenders so you can stay away from them.
When it comes to leveraging properties, there are huge risks involved. Your lender must carefully explain the risks. Those who want to make extra bucks will embellish their application such that the income, down payment, and property assessment values are exaggerated, ultimately helping themselves to a huge loan.
Be Wary Of Money Laundering
Money laundering is another standard method of deceit. Illegal money is made to seem like a clean asset. Stay wary of people who purchase a property with criminal proceedings and sell it to others. On the face of it, the property might look legitimate to you, but only careful inspection and assessment can spell out the dirty secrets.
There’s only one way to prepare and protect yourself against fraud: constant vigilance! Do your homework, and stay cautious and intelligent about every investment decision you make.