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Published:January 7th, 2007 07:43 EST
College Mortgage Fraud scams

College Mortgage Fraud scams

By Cindi Dixon

According to the FBI, mortgage fraud is the fastest growing white collar crime in the United States today.  Headline news reports congressmen, drug dealers and the Mob are all involved.  Just think:  How many credit cards would have to be stolen or how many drug deals would have to go down to yield $3Million dollars?  Criminals and others alike are getting in on the “Get Rick Quick in Real Estate” scams and people with good credit and big dreams are a primary target.

For years now the business world has been aggressively targeting college students with good credit for credit cards and other “special offers” that sound too good to be true.  Guess what?  They are!  In fewer circumstances does the old adage hold more true than when looking into the devastation mortgage fraud is causing.  Around the nation, across all walks of life, young and old are being targeted and falling victim to this crime which generates substantial profits for the orchestrators and financial devastation for years to follow for its victims.  Here’s how it goes.

Flyers, referrals, and even eBay solicit people looking to buy property with No Money Down or to join “investment clubs”.  They’ll do all the work for you, all you have to do is provide your name, address and social security number.  In 30 days you will own one or more properties, investment or for your residence, and best of all you’ll get cash back at closing.  Now at first glance this sound like a win-win situation.  The home seller sells their property; the property gets rented out by individuals coordinating the deal, you own your first home, make a couple thousand well needed dollars, and start building serious credit.  When you are out of school you will already own a home and are building equity.  A dream come true!  What this scam actually represents is seven year long nightmare waiting to happen. 

When these scams unravel, it is reveled that the only profiteers are the professionals who pulled the crime ring together.  Most often the parties include a mortgage broker, a realtor, a real estate attorney, and a title officer.  They all get paid by the seller and you, while pocketing profits to pay your mortgage note just long enough to sell it off on the secondary market, usually three payments only.  Then the collection calls begin, and the foreclosure is initiated.  Hiring a lawyer, for most people, is not a financial options, as these professional scammers know well in advance because they have all of your financial information.  Your hands are tied.  So you call the local police to report it.  They are not well versed in this specialized organized crime.  You are referred to the FBI.  Do your losses exceed $10Million dollars, the average loss required for FBI involvement.  Not usually.   The great majority of innocent victims of this crime are left with no where to turn, destroyed credit, and are oftentimes out of cash as well.

Who can you trust, you ask?  Trust your instincts.  If it sounds too good to be true, it most likely is.  People rarely seek others out to “share the wealth”.  Talk with your parents, professors, and others you trust.  Ask for referrals.  Do your homework.  Check with your local or state department of real estate or board of realtors.  Ask them about the transaction.  Let the individuals soliciting you know you are researching them and the transaction.  Usually, if you show you are informed, that will be enough to send them running to an easier target.  Walk into your local bank or credit union and ask a branch loan officer for feedback or advice.  They can usually let you know if something is amiss.  Finally, if you are looking for a solid investment, keep in mind this is a long term financial obligation.  If you do not qualify for a bank loan you most likely shouldn’t.  A mortgage is a 30 year obligation that should be well thought through and planned for.  You have the rest of your life to plan and decide what will be best for you.  Don’t rush into anything now.  When you are ready, and properly informed, you can begin to build your financial portfolio and build the wealth you desire.  Don’t let anyone take that away from you for their own gain.

Cindi Dixon is the President and co-founder of Mela Capital Group, a Mortgage Fraud Consuting firm.  Ms. Dixon has overseen over $3Billion dollars in mortgage fruad audits for the nation's leading mortgage originators and Wall Street mortgage backed securities investors.  Ms. Dixon can be reached at Cindi@MortgageFraudQC.com.  Visit the Mortgage Fraud Discussion Board for additional information, to post comments, or ask questions.  The web address is:  http://discussionboards.mortgagefraudqc.com/.