the wasserblawg

I do not really know why I am so fascinated by mortgage fraud, but I just am. Here is a fascinating description of the level of sophistication and determination of the fraudsters. Next time you - or your client - or your client's buyer complains about all the paperwork they need to submit to document their loan applications, consider how much tougher it must be when you are making the stuff up as you go along... 'Next wave' of mortgage fraud strikes | StarTribune .com

There are about as many ways to scam the unwary real estate consumer as their are stars in the sky, or so it seems. This one is an oldy , but a goody: the mortgage hand-off scam. The con is a pretty simple one: send an official looking notice to a hapless homeowner (typically, but not always, an unsophisticated new buyer). Tell the owner that his mortgage has been sold to Mega Mortgage Financial Security, Co. and direct all future payments to the scammer's post office box. Collect a couple-three payments and move on before the real lender starts calling on the homeowner to find out why he stopped paying on the loan. FEDERAL LAW REQUIRES A "WELCOME" FROM YOUR NEW LOAN SERVICER and an "EXIT" FROM THE OLD ONE - NEVER MAKE A CHANGE UNTIL BOTH CONFIRM THAT A CHANGE IS TAKING PLACE. A more detailed report here, from the Chicago Tribune: Beware the hand-off rip-off scheme I have been warning home buyers about this particular fraud for years now. I hope and trust ...

The old standard operating procedure for Chicago area residential closings may be changing a bit, based on an announcement I recently received from  Chicago Title. Outbound emails from CT's REO unit in Carrol Stream now advise recipients that the title company will no longer accept third party checks at closings. Apparently, company auditors  want all funds to be made payable directly to the title company. The new rule is effective May 1, 2011, but I am told that Carrol Stream is implementing a  "soft" introduction of the new rules  to allow time for word to get out of the change. The rule of thumb for as long as  I have been handling Chicago area real estate closings has been that any funds a Buyer (or Seller) would bring to the closing table would be in the form of a wire transfer or a cashiers/certified check made payable to that Buyer (or Seller). Once the parties were satisfied with all of the closing documents and settlement figures, the Buyer would e...

I previously posted about this last September . It appears that the problem persists, and is worsening: Last week,  WalletPop reported : The Internet Crime Complaint Center's latest scam alert includes a counterfeit check scheme targeting real estate professionals. Alerts by the   IC3 , a partnership between the   FBI   and the   National White Collar Crime Center (NW3C), reflect recent cyber-crime trends and new takes on existing scams.  Here's a summary of the new threat: Counterfeit Check Scam Targets Realtors and Real Estate Attorneys The IC3 says it's received complaints about counterfeit check scams for years, which typically involve criminals convincing unsuspecting victims to cash checks or money orders and then wire them a portion of the funds overseas. Only after wiring the funds do the victims learn the check was fake -- leaving them holding the bag for the full amount. The latest variation on this scam targets realtors and real estate atto...

How Freddie Mac REO Selling Agents Can Make an Extra $1,200

WBEZ Reports: ‘Sweet Home Chicago’ affordable housing ordinance passes In one of his final legislative acts, Mayor Richard Daley compromised with the Chicago City Council on an ordinance to fund affordable housing. It took nearly two years of stalling, back and forth negotiations and political maneuvering. But now some tax money is available to developers to buy and rehab vacant Chicago homes or apartment rentals. The money comes from a pot known as tax increment financing – or TIFS. Ald. Walter Burnett worked with the neighborhood coalition known as Sweet Home Chicago to get the measure passed. Advocates see it as a way to mitigate the foreclosure crisis. "People need some relief and they need some help. And this is a good step in the right direction. We pray that the next administration -- that it won’t take as long or be as hard," Burnett said. The ordinance allows developers to receive up to 50 percent of the cost of purchase and rehab of multi-family rental buildings if ...

The late great PLM Title closed under mysterious circumstances  nearly three years ago. I previously blogged about this here and here .  As reported  in yesterday's Morning Herald , a mystery no more.  That ugly saga represented one of every real estate lawyers worst nightmare scenarios. The evil doers apparently took funds from closings that were supposed to be used to pay-off old mortgages for their own use. Those unpaid mortgages hampered many otherwise innocent buyers and sellers. Could this happen again? Sure, I suppose so. Fortunately however, Illinois  home buyers and sellers are now protected by a recent change to the Illinois Title Insurance Ac t that requires mandatory  closing protection letters. Every title insurance agent's underwriter must now assure the buyer, new mortgage lender, and seller that no loss will be suffered as the result of a dishonest title agent. Of course, buyers and sellers are paying new fees for that protection, bu...