Avoiding mortgage and real estate fraud

Who is the primary target in a chunking sceme?

Wanna be investors

What is the motivation of a straw buyer to let their name and credit rating be used in a real estate transaction?

Money

If you suspect real estate or mortgage fraud is taking place in your transaction, who should you report this to?

Your own broker, UT division of real estate, HUD, Fannie Mae, and FBI

When a seller agrees to sell their property for more than they are willing to take, supposedly carrying a second mortgage for the buyer, however, the seller does not intend for the buyer to ever have to pay the amount of the second mortgage to them, this is an example of what?

A silent second

When a loan is granted on a property that doesn't actually exist at the address, this is known as what

Air loan

Novelty paycheck stubs are an example of what type of fraud?

Application

Identity fraud can be more difficult to prosecute because of what reason?

Because finding the real people behind stolen identities can be more difficult

Why is it likely the laws and procedures concerning appraising of real estate will change?

Because the creation of AMCs has created other unintended consequences.

The number of cases of mortgage fraud has

Been steadily increasing each year in the 21st century

Flopping is best described as

Buying a property, then immediately reselling it at an artificially inflated value.

How can a fraudster identify people who are behind on their mortgage?

By looking at the county records for the filing of Notice of Defaults

Foreclosure fraudsters can sometimes get the homeowner to move out, then they can get money doing what?

Collect a fee from the homeowner, but never even call their lender, move renters in and collect rent, and security deposits even though they will be evicted when the bank forecloses.

T/F: Agreements between the buyer and seller only need to be disclosed to the lender if they are put into writing.

False

T/F: Mortgage fraud is reported through the Mortgage Asset Research Institute (MARI)

False

T/F: The term flipping is only used when discussing real estate purchases and sales.

False

T/F: When a straw buyer is used, the straw buyer typically intends to occupy the home and make the payments.

False

Name the fraud schemes where a straw buyer is frequently used

Flopping, Flipping, and Churning

If a real estate licensee has the opportunity to list a property for a seller who are the only needs its old and is willing to offer it below market, that Licensee cannot arrange a buyer at lower price, then immediately sell the property for profit without notifying the seller of the ___ buyer

Other or another

Illegal property flipping can be defined as

Purchasing properties and then artificially inflating their value through fraudulent appraisals.

The FBI collects data on mortgage fraud through which of the two following

SARs and Department of housing and Urban developments office of the inspector General

Multi agency ______ force

Task

In a typical fraud for profit scan, which of the following could potentially be involved in the scheme

The Real Estate licensee, The Appraiser, The loan officer, and The title personnel

In fullfilling your fiduciary duty to the seller and your professional legal obligations as a licensee, who must be told that a third party exists who is willing to pay more than what the bank has approved in the short sale?

The seller and any other parties with financial interest in the property such as the sellers bank in a short sale transaction

What can happen to a real estate licensee who participates in a flopping scheme?

They will likely lose their license, they can be required to pay very large criminal penalties, any parties harmed can sue the licensee for civil damages, and the licensee can be required to serve jail time and/or prison sentence.

The FBI is now hiring more employees with accounting backgrounds primarily due to the following reasons:

To better investigate the increasing number of white collar crimes

T/F: A fraud scheme in which seminars are used is often referred to as chunking.

True

T/F: Federal offices have been inundated with mortgage and real estate fraud complaints.

True

T/F: In some foreclosure scam situations, the homeowner is deceived into signing over the title of their property to the scammer.

True

T/F: Mortgage fraud can have global economic implications.

True

T/F: everyone involved in a real estate transaction is responsible for identifying problems in that real estate transactions and can be held accountable when fraud occurs.

True

T/F: some clients connect loan or real estate fraud when they are advised to do so by the real estate and or mortgage licensee.

True