Nearly six years ago, I was introduced to the perils of Mortgage and Real Estate Fraud. It was as sobering an introduction to yet another form of crime as I had ever seen. I’d heard of scams where senior citizens were duped by unscrupulous operators, but I never imagined there were highly sophisticated and systematic criminal rings whose sole purpose it was to defraud lenders or consumers. It’s getting worse.

Fast-forward to today and recent news from Bloomberg tells us that the FBI has assigned 150 agents to work on over 1300 mortgage fraud cases. The Bureau appears to ready to slug it out against perpetrators of fraud. Where this type of fraud occurs en masse, by the way, home values usually go down. The reason is that the homes are dumped back on the market after foreclosure process has occurred and it creates excess supply that lowers prices. These are things buyers and sellers need to know.

The FBI  recently reported that the top 10 hot spots for mortgage fraud were Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado and Minnesota. Other states that have been "significantly affected" by mortgage fraud are Arizona, Maryland, Utah, Nevada, Missouri, Indiana, Tennessee, Virginia, New Jersey and Connecticut. That’s 20 states and most of the largest in the country.
What this means to buyers is that you have to look at more than just Listings and recently closed sales. You need to understand foreclosures, flipping activity, a property’s history and market trends. You can’t afford not to know. “I didn’t know” just isn’t a valid excuse because the information is out there and available. Uncovering potential risk factors can save you from making a wrong decision that you’ll have to live with a long time and you may well lose money in real estate if you aren’t informed.
Real estate agents should also heed this call to “discover” potential risks on behalf of your client. You may delay a deal closing, but you will likely have a client for years to come if you help them avoid risky areas. Even if they go ahead and buy in a risky area, the reports will help them negotiate and they will have knowledge of what they are getting into with the purchase. Try www.homesmartreports.com  to discover a means to avoid risk.