In recent news, CNN Money & the Washington Post both reported on the court ruling of a Bridgeport, Connecticut real estate agent that defrauded Regions Bank in a short sale scam.
Sergio Natera, 35, admitted his involvement in a mortgage fraud scheme in Bridgeport federal court. According to court documents and statements made in court, Natera worked with another real estate agent to defraud Regions Bank, which held two mortgages on a residential property in Bridgeport. On Dec. 5, 2007, the other real estate agent, who was a listing agent for the property, received an offer to purchase the property for a price of $132,500, according to a release from the U.S. Attorney’s Office.
However, Natera subsequently communicated to Regions Bank that the highest offer to purchase the property was for $102,375 by BOS Asset Management LLC, an entity that Natera controlled, the release said. The bank reportedly agreed to a short sale of the property for the lower price, and released its mortgages on the property. On June 9, 2008, Natera, through BOS Asset Management, sold the property for $132,500 to the original bidder on the property, according to the release.
The impact of short sale fraud goes well beyond the direct losses to banks. These frauds have become so common that it has become more difficult for legitimate short-sale transactions to go through. Five years ago, when the housing market was thriving, lenders rarely heard of a short sale fraud. But as the housing market crumbled and beleaguered homeowners increasingly turned to short sales to get out of their underwater mortgages, the frauds increased as well. Now, 13% of all existing homes sales are short sales, according to the National Association of Realtors.
Last year, frauds associated with short sales comprised half of all fraud investigations for mortgage companies like Freddie Mac. But fraud ultimately hurts homeowners because it forces more of them into foreclosure. It hurts banks by adding to their costs and it can make all the parties more cautious.
Tammy Mitchell Hines is a Certified Short Sale Specialist with the qualifications and expertise to make sure your real estate transaction is 100% legal, no scams or schemes involved. Speak to the professionals at Tammy Mitchell Hines & Co for all your real estate needs. 618-281-HOME (4663)