Buy a home in your name with no money down, we’ll rent it out and make the payments — and you will get the appreciation and build your credit.
This seductive pitch resulted in several arrests in Florida in connection with a mortgage fraud scheme. An investigation dubbed "Operation Green Acres" uncovered a scam in which 24 "straw buyers" were recruited from Miami and Naples to "purchase" Big Sun Valley houses in the Ocala area. Most of the straw buyers did not speak, read or write English or had a very limited English vocabulary.
These "buyers" were allegedly told they could buy a home with no down payment, and that the builder would rent the house for them and make mortgage payments for several years. The buyer could then move into the house or sell it for a profit and increase their credit rating for future purchases.
The builder was paid, but the mortgage lenders weren’t. Some borrowers were forced into bankruptcy, and their credit ratings were damaged instead of helped.
Right now, the real estate market it hot, and so is mortgage fraud.
Just last week I heard from a woman who was a straw buyer on a house that was headed for foreclosure. While she was worried about hurting her credit rating, I knew that would be the least of her worries. I advised her to find a good attorney to make sure the mortgage fraud scheme she participated in didn’t land her in jail.
Beware: Don’t let anyone talk you into a real estate investment opportunity that doesn’t pass the sniff test.
Gerri Detweiler Credit.com's Personal Finance Expert, Gerri focuses on financial legislation, budgeting, debt recovery and consumer savings information. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.comTalk Credit Radio. Reach Gerri at creditexperts@credit.com.
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It is amazing to watch money evolve from worthwhile to worthless.
The United States is running the country on borrowed money. People are
not succeeding in life, they are buying success and going
bankrupt because they are not following any restraint or fear of
loss. Their is always cheaper money to buy in the US. This is so
dangerous and I believe the value of the US dollar would crash if
the actual value that is placed on our own currency was understood by the
rest of the world.
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While we’re on Mortgage fraud scheme entangles borrowers, In case you are already a homeowner then you might have access to some equity, this means that the value of your property is higher than the outstanding quantity on your mortgage.