What REALTORS® can do to stop fraud
More than 500 REALTORS® attended the Short Sale Fraud Special Industries Class presented by the Minnesota Association of REALTORS® on March 9.
This continuing education opportunity featured some sobering numbers of fraud in Minnesota, what investigators are doing to try and stop fraud and how REALTORS® can be involved in the fight against real estate fraud.
Attorney Brad Boyd outlined just what fraud is. It’s a “misrepresentation or omission, often for the purpose of obtaining a profit or material benefit.” Brad told the group that “we all pay the price for real estate fraud – imagine where the housing market and economy might be today, had real estate fraud transactions never occurred in significant numbers.” It is a sobering thought – where would we be if those fraudulent loans and transactions hadn’t happened?
Minnesota is #3 in the number of mortgage fraud cases being prosecuted (Florida and California are numbers one and two, respectively). If you’re convicted of fraud, the punishment can include $10,000 per violation, suspension of a license or revocation of license. What can you do if you think a fraud is happening? Don’t keep quiet! Brad recommends asking questions, challenging assumptions, obtain legal counsel and report what’s going on. You can see a list of some of the schemes the FBI is tracking here.
- Watch for people qualifying for loans well outside of their ability to pay
- Brokers or agents exceeding far beyond industry norms
- Rumors of shops that make miracles happen
- Agents or brokers who consistently use the same appraiser or title company
- Information that doesn’t pass the smell test
Special Agent Kahn also discussed a government and private sector alliance called “InfraGard.” Its goal is to support information sharing between the FBI and private industries. It’s free to join but you do need to be a U.S. citizen, pass a limited FBI background check and sign privacy and non-disclosure agreements.
If you do suspect a case of real estate fraud, here are several places to contact: