Real estate fraud has become a rampant issue since the 2008 financial crisis. Public figures blame the downfall of the economy on dishonest mortgage conduction. Suspects of real estate fraud may find themselves in federal prison for years. It’s essential to look for help for freedom and rights protection. New Jersey real estate fraud lawyers can help you understand the charges you will face and explore various options to defend yourself.
Classification of Real estate fraud
Real estate professionals, individuals, banks, investors, and businesses can execute real estate fraud schemes. Below is a real estate fraud classification that can lead to criminal charges.
- Title fraud
- Broker fraud
- Illegal property flipping
- Foreclosure rescue scam
- Escrow fraud
- Investment fraud
At the state or the federal level, every real estate fraud scheme has multiple criminal charges. The charge will depend on what the prosecutor or the US attorney pursues. Spodek Law Group has experienced real estate fraud lawyers with vast knowledge in state and federal law to help you with any real estate scheme and develop a solution for you. Contact us immediately when under investigation to help you understand your rights during the process. We will also help ensure the investigators respect your freedom and protect you from the accusation.
Title fraud is where a body provides misleading information and misinterpretation of a property to have a clean and clear title to a potential buyer. Individuals can also identify themselves as the property owners and sell it to a buyer. The property owner will be required to defend himself in the property’s interest and evict the buyer to get back his title.
A broker fraud entails collecting money sent by a prospective home buyer instead of putting it in an escrow account. Real estate brokers provide false information to prospective buyers to bring them to purchasing a home at a rate above the market value for their interest.
Illegal Property flipping
Illegal property flipping occurs when the selling of property is purchased and sold quickly above the appraisal value. Persons dealing with the property purchase do not disclose all the information concerning it to the buyers and lead to the hiding of defects. The buyer in question may also be charged by law with property flipping fraud.
Foreclosure rescue scam
There are different types of foreclosure fraud involved in this section. They include:
Fees for negotiating
A negotiation fee is when an investor convinces a homeowner that they can renegotiate a home loan for a fee. When the payment is collected, it is the negotiator that benefits and no negotiation occur in the home loan.
Title fraud and leasebacks
The type of fraud occurs when investors or companies convince a homeowner to enact a temporal title transfer when they are in foreclosure to save their house. The investors put up the property on sale and pay the lowest amount to homeowners. They then leave them on the mortgage hook.
A homeowner gives up his homeownership but continues to pay rent and lives in the house. The Investor or the company that took over the ownership can either cash out house interests or receive rent from the homeowner. In the end, the mortgage payment is avoided, and the subsequent homeowner is evicted from the house. The home is sold or goes to foreclosure.
This is a situation where investors make counterfeit checks for property deposits. When a homeowner is applying for a home loan, a hud-1 settlement statement must provide information on how companies should make payment. It can either be paid through an existing loan or credit card. Escrow companies can modify this statement and fail to follow instructions. The company or the individual will end up taking the money while the borrower escrow account has nothing.
When investors purchase investment properties under a pretense, it leads to real estate investment fraud. This type of scheme requires an investor to buy a large investment to purchase at high value or higher rates on capital contributed. In return, the cost increases and does not materialize.
Other real estate fraud classification includes
- Land fraud
- Predatory lending
- Equity skimming
The penalties of real estate fraud include
- Criminal charges from the federal and state level
- Fines of up to 1 million dollars
- Decades of imprisonment of up to 30 years
An individual facing real estate fraud can also get his bank account frozen by the government and his belonging taken before a criminal conviction. Understanding your rights during the federal prosecution process is essential. There are available defenses for fraud charges to protect you. Call Spodek Law Group and get help from experienced real estate fraud lawyers.