Real estate fraud is one of the fastest growing issues in the industry. With more than 75 percent of fraud caused by real estate professionals, people within the business need to address and fix the problem. Instead of sitting back and watching fraud continue, now is the time to take action.
How Real Estate Fraud Is Affecting The Housing Market
The housing market is in trouble partly due to the amount of fraud committed by real estate professionals over the last few years. Unfortunately, scammers have not stopped. In fact, their activity has increased in an attempt to cash in while homes keep flooding the market. This sustained fraud not only causes economic difficulties, but it also creates mistrust with real estate professionals and a ruined reputation among the industry as a whole.
Understanding Types Of Real Estate Fraud
Lenders have been more active in the past few years, but this activity has become a breeding ground for fraudulent activity. Real estate fraud experts deliberately set up scams in order to hold all parties accountable, tracing nothing back to them. Some professionals allow others to set up a loan, despite knowing they cannot afford the payments later, thereby promoting ethical wrongdoings that encourage a dishonest atmosphere.
Many mortgage loans do not need significant amounts of verification like a borrower's income, so these lenders end up caught in mortgage fraud. Swindlers come to homeowners with the solution of helping them pay off their mortgage, but then refinancing it through a series of other loans and earning a profit without ever paying the broker.
What You Can Do To Stop Real Estate Fraud
Part of stopping this immeasurable fraud is educating yourself and others on how to spot the signs. Learn about which frauds are most common and teach your clients in order to save them from a financial crisis in the future.
For example, a house that soars in price and immediately sells after being on the market for several months is suspicious. Talk to the manager of the title company if you think something is wrong at the closing, explaining your doubts and ask to speak to the lender.
Moreover, real estate professionals need to start taking responsibility for their actions. This includes disregarding the actions of fellow colleagues. Fraud is bad for everyone, including your business, so the longer you allow it to go on, the more you hurt. Show some integrity and stay away from questionable transactions in addition to reporting incidents of fraud.
