San Diego – Sale And Crash Foreclosure Scams
Investigators have stumbled upon a racket known as inflated-sale-and-crash schemes in which countless have fallen victims. The buyer in collusion with shady real estate dealers buy a home at more than the current market price, receives cash at the closing of escrow and then intentionally allows the property to fall into a foreclosure. 400 such cases have already been traced. In a couple of months the dealers have pocketed more than a million dollars.
Lackner, an appraiser since 1989, while investigating a property in San Diego suddenly noticed that one had been sold at $70,000 more than the listed price. He quickly did some spot-checking and found that the property was rundown and vacant. He immediately smelt a rat and began checking on the agent who had represented the purchaser. It showed that the man had been implicated in the buying of 17 other properties over a period of few months. All the deals looked suspicious. Out of these 10 were subsequently foreclosed.
Lackner set to work and turned over the documents to federal and state investigators. In an email to North County Times, an FBI official, without being specific, said that mortgage frauds have become a regular problem requiring the FBI to team up with other law enforcement agencies to brook the culprits. It is the main priority area of the FBI because it has an overall impact on the economy of the entire nation. Within two years from 2004 the number of reported cases has doubled from 17,127 to 35,617. It points to losses over $1 billion for the owners. The crimes are netting in far more than what an average bank robber pockets – $5,000! It amounts to robbing 10 to 20 banks per day. Appraisers and agents are hand in glove in this crime. The ill-gotten gains are then split between the two crooks. The game plan is that the buyer stops paying mortgages after a couple of months. The bank declares default and takes steps for foreclosure and dispossession of the owners.
The real sore point is that neighboring property values rise. But foreclosed homes are sold at less than the current price causing an opposite effect of real estate values in the area. California is credited with having more than one third of the nation’s suspicious loan activity. Most frauds surfaced during the middle of 2006.
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