Mortgage Scams in California

In recent years, there has been a marked increase in the rate of residential real estate foreclosures. Widespread foreclosure brings with it feelings of despair and, at times, desperation. After all, who actually wants to lose their home, and often at the same time, their entire savings? With this unfortunate trend comes an equally marked increase in the number of mortgage loan scams.

Scammers offer what would be virtually a miracle to the troubled homeowner so it is not hard to see why, at least for a percentage of the affected population, that the scammer’s message falls on eager ears.

This sad trend is more-or-less nationwide. There are very few areas where the residential real estate market has not seen a downturn during the last few years. However, nowhere is it more apparent than in California. It was the state that was the first to bid up real estate prices to unrealistic levels, and it was the first to see the big declines, and subsequent foreclosures.

For example, tracking last June’s residential home sales in Southern California yields the astonishing fact that about fifty percent of them have already been repossessed. Not all repossessions were via foreclosure as some were voluntary. Nevertheless, the sad fact remains that it translates to nearly seven hundred families lost their homes, per day!

In the combined San Bernardino and Riverside counties areas, there were fifty thousand foreclosures (one in about every eighty homes), and that is only in the first quarter of last year. Taken by itself it is already an impressive figure but also consider that that it was up more than forty percent from the previous quarter and twenty-five percent over the first quarter of the prior year.

On a higher note, the increase in available homes on the market has caused many buyers to come looking for bargains. This at least has helped keep the bottom from completely falling out. However, the combination of desperate sellers and over-eager buyers has produced a fertile hunting ground for real estate scam artists.

The FBI alone, not counting all the other government agencies, has nearly three thousand cases of suspected residential mortgage fraud under investigation. That’s about four times higher than the levels of just a couple of years ago.

It is often not easy to spot a fraud. The scammers are very sophisticated. They offer a great deal on the surface but the scam often lies in the fine print.

There are many online sites that look just like official government websites but are really only designed to extract fees from the unsuspecting. At the worst they even end up owning the homes in question through the almost certain default that is created by the fine print of the contact.

Phony online real estate scams are particularly difficult to control. Many are located in nearby Mexico, or another country, where they can act with relative impunity. So, here’s a word to the wise. If you see a deal that appears too good to be true, it almost certainly is not legitimate.

Regardless of how desperate you are to sell or eager to grab up a great bargain, you need to carefully first research the parties with whom you are dealing.

Original: Mortgage Scams in California