I spent over $2500 on getting financing in place and another $1000 on appliances based on the info that the original selling agent told my agent that the bank approved the short sale.I don't know enough about short sales (very little actually) to know if someone acted inappropriately or fraudulently.

Don't worry about the existing loan, unless you did something fraudulent.

I’m curious to know what recourse there is to chase this person down and/or get the money back since it was fraudulently cashed.

``````````````````````````````````````````````````````````````````````````````````````````````````````````````````````````````````People that are behind on payments and PITI is more than market rent and have no equity is a real bad gamble.

Explain that you are concerned this could have been a fraudulent transaction.

Buying investment property via a fraudulent transaction likely won't have a happy ending.  

Chalk this one up as a "win" from a knowledge perspective, and move on to better cash flow opportunities (unless I'm missing something on the appreciation side...but I would caution there is a fine line between appreciation investing and gambling!).

However this web site declared the practice fraudulent.

If you don't have at least three at an absolute minimum, you're really gambling with your livelihood.

Tampa Bay resident / investor including one caution I have not seen mentioned.In the past there were fraudulent sinkhole claims paid but this is an area    known for current activity sinkholes.