Short Sale Fraud Is Fun

     Short sale fraud is fun unless you are the defraudee.  It is kinda like going snipe hunting in the boy scouts.
     This happens every day.  Many people, many Realtors don't think this is fraud. 
     If you are the person being defrauded, this is not fun. 
     Here is Mr. Beingforeclosedon. He is approached by Mr. Scammer or he approaches Mr. Scammer from his signs around town. Mr. Scammer says " I will buy your house and your troubles are over".  Since Mr. Beingforeclosedon  owes $150,000 on his house and it is only worth $100,000 , Mr. Scammer can't give any money to Mr. Beingforeclosed on.  Mr. Beingforeclosedon gives Mr. Scammer a deed to the property.  Mr. Scammer owns the property.  Mr. Beingforeclosedon owes the $150,000 mortgage.  Most laymen do not understand the difference between a deed, which transfers ownership, and a mortgage and note, which creates debt and a lien.  That is another blog.  I think I will write that blog and get it posted soon.
     Then Mr. Scammer lists the house with a Realtor ( that may or may not be in on the scam) for $100,000.  Then Mr. Innocentbuyer buys the house from Mr. Realtor for $100,000, a good buy.
   Now the Realtor contacts the bank and convinces the bank that the house is only worth $85,000.  The bank accepts the $85000 because they believe that Mr. Beingforeclosedon stills owns the house.  Mr. Scammer has never recorded the deed.
     The bank agrees to accept the $85000.  Mr. Beingforeclosed on deeds the house a second time to Mr. Innocentbuyer.  The bank gets $85,000.  Mr. Innocentbuyer gets the house for $ 100,000.  Mr Scammer gets  $15000 which may show on the closing statement as a "assignment fee" or "consultation fee" or "scam fee" (just kidding).  Mr. Realtor gets a commission.
     Who got cheated in this story?  Mr. Innocentbuyer  paid too much.  Mr. Beingforeclosedon got cheated out of $15,000. Is this fraud?  I think it is.  If you disagree with me, call a prosecutor at the Division of Real Estate in Orlando and read this article to them.  See what they say.
     If you have to keep secrets from anyone,( yes,including the bank ) , that is fraud.  Do you think Mr. Appraiser knew about the sale from Mr. Beingforeclosedon to Mr. Scammer?  Do you think the bank knew about the sale from Mr. Scammer to Mr. Innocentbuyer?
     If you are a Realtor, do not participate in fraud.  If you do, don't be mad when you get caught and the Florida Real Estate Commission suspends your real estate license.  If you are Mr. Innocentbuyer  in this story, seek legal advice  from an attorney before you spend your money.   If I can help in any way, call me at 407 822 3926 or http://www.climerrealestateschool.com/ .