Florida has a reputation for having a large amount of fraud perpetrated on its citizens, and real estate has proven to be no exception. Con artists prey on people by using trickery and lies, and some of these criminals are so sophisticated even the most savvy homeowners can be taken.
As an experienced real estate attorney, our practice sees too many people losing their home, or having to scramble while working with the police to save it. Knowing some of the most common homeowner frauds that are out there can help you protect yourself from humanity’s worst.
1. Loan Payoff Wire Fraud
This is a huge scam that is increasingly sweeping up home sellers and the buyers of their homes.
Here’s how it works: A scammer hacks into the email account of one of the parties to the sale–often the Realtor. Then they sit back quietly and watch the details of the transaction as it transpires. At the crucial juncture when the sale is about to be completed, they send their own email pretending to be the seller or the seller’s bank. This email includes their own wiring instructions in the hopes that the money from the sale will be diverted to them. Once the transaction is complete, the money erroneously sent to them is quickly transferred to an offshore account or a crypto wallet, never to be seen again.
Unfortunately these criminals have been successful on many occasions, leaving sellers without their profits or their mortgage paid off, and buyers in limbo about the ownership of the home. Some of these fraudsters are so sophisticated they have set up fake websites for their “bank,” duping the closing agent into thinking they’re sending money to a real institution.
The most important way to protect yourself is to always speak by phone to our office or another closing agent to verify your wiring instructions before a closing occurs.
2. Fake Listings
The COVID-19 pandemic and the subsequent rise in remote work have opened the door for scammers to fake real estate transactions from start to finish.
It begins with a fake listing at a price that seems too good to be true. In reality, the house displayed in the listing–photos and all–is not owned by the person claiming to be selling it. Once a buyer puts in an offer, the scammers impersonate mortgage and title agents and take the unsuspecting victim through every step of a seemingly legitimate real estate transaction. Of course, after the money is wired (often offshore) the buyer learns that someone else already legally owns the home.
Spotting a fake listing can be difficult. But the old adage if something is too good to be true it probably is accurate for homeownership too. If you have a question about the authenticity of ownership, a real estate lawyer can look through title records to see who actually owns a given property. This is also a reason to work with a reputable Realtor when seeking a new home.
3. Loan Refinancing Scams
This category of scams differs from the prior two because the service provided is not actually fake. But those involved are referred to as “predatory lenders” for good reason. Their primary targets are elderly homeowners or individuals who suffer from cognitive impairment.
These people contact homeowners and convince them to refinance their loans, while charging exorbitant fees and points for the transaction. The homeowner may have had a great 2.5% 30-year-loan, but after the refinance they end up with a rate of 10% or more, with monthly payments beyond what the person can afford. Sometimes the homeowner is also encouraged to take cash out of their home, leaving unsuspecting future heirs with no knowledge that the equity is being drained.
Refinancing a home loan can make sense in certain situations, but with interest rates rising most people’s original loans are better than anything they can get today. No one should refinance based on a sales phone call. If you do want to refinance your mortgage, talk to lenders at reputable banks or other institutions so you can avoid predatory lenders.
Remember, too, that you can choose to have your real estate lawyer handle your refinancing closing. This involves much of the same paperwork as a home sale. By using an independent attorney rather than the closing agent the mortgage broker recommends, your interests would be better protected.
4. Foreclosure Relief
When a homeowner has fallen behind on mortgage payments and is facing the prospect of foreclosure, desperation can increase their risk of being scammed. This is why criminals sometimes search the public records to identify homes in preforeclosure whose owners they may be able to target.
Once such a target is identified, the con artist presents themselves as foreclosure experts, claiming they can help the owner negotiate on their behalf to regain their financial footing and keep their home Of course, their services are offered for a hefty, upfront fee, generally hundreds or thousands of dollars. Once the money is paid, the “expert’s” phone number changes, and they disappear, leaving the homeowner with the same foreclosure risk but now with fewer funds to start over somewhere else.
There are reputable credit agencies that may help you repair your bad credit. But this is a long-term prospect so you can better manage your money, not a quick fix when you’re about to enter foreclosure. In that situation, you can try to negotiate with your lender to forestall the foreclosure, but in our experience this is not often successful.
5. Scams on a Homeowner’s Heirs
This new trend among scammers recently led to two women being arrested and charged with an array of felonies in South Florida because they allegedly defrauded unsuspecting homeowners out of more than a half million dollars.
These scams begin when the criminal searches for homes with unpaid property taxes, which can be an indicator that a homeowner might have recently passed away. Local obituaries also often help identify potential targets.
Once a property is in the scammer’s crosshairs, they generally employ one of two tactics. Either they contact the rightful heir and convince them to sign over the deed to the house, often citing dire structural conditions and costly repairs they can save them from. If this isn’t successful or if no heir is identified, someone with an identical last name is enticed to step in and pretend to be the heir. After title to the home is transferred to the con artist, it is sold for a profit, which they–not the legitimate heir who hasn’t yet started a probate–will pocket.
When a loved one passes away, it is important for the rightful heirs to immediately speak with an attorney specializing in probate law. Our firm or other probate expert can advise what steps need to be taken–including keeping all payments on a house up to date.
Don’t waste time searching “Probate lawyer near me,” or “Real estate lawyer near me.” The Law Office of Gary M. Landau, P.A. has decades of experiencing serving probate and real estate clients in Broward and Palm Beach County.
With more than 25 years of experience and countless satisfied clients, Gary M. Landau and his team are uniquely positioned to help you with your probate and real estate needs in South Florida. Whether you’re ready to probate a loved one’s estate or to write your own will, or if you are purchasing a home, have inherited a home, or want a closing agent to handle title insurance and all documents for your closing or refinancing, the Law Office of Gary M. Landau is ready to work with you.
Copyright © 2022. LAW OFFICE OF GARY M. LANDAU, P.A. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction.