With an air loan, a broker creates a lending agreement, complete with false buyers, for a non-existent property. Some of these schemes go so far as to include false employees, contact information and appraisers. Criminals who get away with the deception can steal a substantial sum of ill-gotten gains.
Real estate agents, appraisers and other home loan professionals may work together to inflate the value of a specific property. Buyers pay more than a commercial or residential property is worth, and the scammers walk away with more money. In one instance, a loan processor almost got away with nearly $400,000 through appraisal fraud.
Foreclosure rescue scheme
One type of mortgage fraud the FBI investigates is foreclosure rescue schemes. Criminals approach homeowners facing foreclosure or those in default on their loans and convince them that they can save their homes by signing over the deed to an investor. The fraudsters sell the property for a profit, and the innocent homeowners lose their property anyway when it goes into foreclosure because the criminals failed to keep up with the mortgage payments.
Illegal property flipping
With this scheme, a purchased property receives an appraisal for an inflated value before a transaction. Illegal property flipping is a type of appraisal fraud, and the buyer may also inflate her or his actual income so the fraudulent deal goes through.
Sometimes, criminals make it seem as if they have plans to move into a home to take advantage of low owner-occupied interest rates.
Loan modification scheme
Homeowners struggling to keep up with their mortgage payments may become unknowing victims who agree to a loan modification scheme. Victims pay extra fees in the hopes of receiving help to secure better loan terms, hopes that criminals dash when they abscond with the victim’s money and the mortgage terms remain the same.
Mortgage professionals and property buyers in Florida should tread carefully in all business transactions. Should the authorities come knocking on their door with claims of mortgage fraud, it is best to seek out the guidance of an experienced legal professional.