Short Sale Schemes to Watch For

A real estate short sale is a type of pre-foreclosure sale in which the lender agrees with the owner possibly in default to accept less than the outstanding loan balance. In some cases a full release of the property lien is issued by the lender to allow conveyance of clear title to a purchaser. Fraud is common in areas facing high levels of foreclosure or homeowner distress. A Short Sale Fraud Scheme may occur when a perpetrator uses a straw buyer (someone who serves as the buyer and consents to the use of his or her personal financial qualifications and name to purchase and ultimately default on a home loan. This short sale scheme situation is created so that the perpetrator can take advantage by purchasing the home at a steep discount.

Short sale fraud may also occur when a person purchases a foreclosed property via short sale, purposely avoids submitting all offers to the lender and pushes a contract of a personal associate without full disclosure to the lender. They then later sell the property the same for a profit.

Our advise: Do your homework! Interview your realtor options carefully. After reviewing of your realtors; hire the agent that will protect your best interest and has the most knowledge of the short sale process. Questions each agent’s knowledge especially when they are planning on passing on your personal short sale file to a so called “Short Sales Negotiation Specialist/Attorney).