Real estate agents at the center of fraud?
According to CNN Money, a new brand of short sale fraud is making the rounds in which lenders are scammed out of tens of thousands of dollars “sometimes in a matter of hours.”
How the scam works
Columnist Les Christie doesn’t lightly address the scam, writing that “the scam artists, usually real estate agents, will secure a legitimate bid on a home, one where the borrower owes far more on the mortgage than the home is worth. Then they arrange for an accomplice investor to make a lower offer on the home.”
The shame of the scam is that these agents who are licensed through various local, state and national board levels are educated to know better which makes the scam even worse than made up companies or individuals looking to make a quick buck.
Robert Hagberg, an investigator for Freddie Mac said, “In most instances, the sellers are apathetic; they’ve basically already lost their homes,” he said. With nothing to gain or lose, they allow agents to handle the entire deal.
Major vulnerability in the real estate sector
According to the National Association of Realtors, 13% of all homes currently on the market are short sales, leaving a major vulnerability in the market that ultimately penalizes short sales agents, especially legitimate agents, as deals become more scrutinized and even more difficult to go through, thanks to the individuals that have sought to game the system and flip for profit.
Profit isn’t evil, but scamming is, and the rare agents involved in perpetuating short sale fraud do damage to the process and even worse damage to the Realtor image. The homeowners will be penalized in the end as the homes they are so desperately trying to not be foreclosed on get stuck in process.