Fraud Schemes Red Flags

 

Property Flipping & Churning

 

> Seller may be in default.

 

> Seller has owned property for a short time.

 

> Title may not indicate seller as owner.

 

> Seller name may not be onsistaqent on appraisal / HUD-1 / title / contact.

 

> Significant property value increase over short period of time.

 

> Two or more closings occur almost simultaneously.

 

> Ownership of property changes two or more times in a brief period.

 

> Non"Arm's- length" transaction.

 

> Title searches show multiple or same-day closings.

 

> Unusal cash payouts at closing on HUD-1

 

Straw Buyer

 

> Seller may be in default.

 

> "Assignment" noted in purchase contact.

 

> Additional names added to purchase contract.

 

> Down payment check is drawn on account that is different from that listed on the loan application.

 

> Investment property is represented as owner-occupied.

 

> No sales agent is involved.

 

> No Borrower credit history

 

> Power of attorney of borrower.

 

Builder Bailout

 

> Sales contract or HUD-1 includes secondary financing

 

> Questionable down payment

 

> Title report indicates default or midification of construction loan.

 

> Non-arm's length transaction.

 

> Sales cocessions are not typical for the market.

 

Identity Theft

 

> Seller may be in default.

 

> 'Assignment' noted in purchase contract.

 

> Additional names added to purchase contract.

 

> SSN is on SSA's Death Master File

 

> Phone number invalid or associated with pager or answering service. Also look for pre-paid telephone services.