Q: I entered into an agreement with an investor/Realtor in 2006 where he was supposed to purchase my home and pay off my loan if he was unable to sell my home in 12 months. It has been three years, and he hasn’t sold my home. Not only that, this person has also placed the title of my home in his name using a quit claim deed but left the mortgage in my name. What can I do?
A: Honestly, I can’t believe it has taken you three years to reach out and ask for help. The moment the so-called investor/Realtor asked you to put the title to the property in his name using a quit claim deed but keep the mortgage in yours, you should have refused and immediately picked up the phone to call the police or the FBI.
What I’m trying to say is you’ve been scammed. What you describe is a classic mortgage fraud scenario.
Housing Scams and Mortgage Fraud Grew in 2008
But you’re not the only victim of a housing scam or mortgage fraud. According to the FBI’s 2008 Mortgage Fraud Report, the recession has only increased the number of housing scams and mortgage fraud taking place in the U.S. Here are some of the highlights of the latest report on housing scams and mortgage fraud from the FBI:
1. Mortgage fraud continued to be an escalating problem in the United States during 2008. Although no central repository exists for collecting mortgage fraud complaints, virtually all law enforcement and industry statistics indicated an upswing in mortgage fraud activity. The number of mortgage fraud filings from financial institutions increased 36 percent to 63,713 and while the total dollar loss attributed to mortgage fraud is unknown; at least 63 percent (1,035) of all pending FBI mortgage fraud investigations during FY2008 involved dollar losses totaling more than $1 million.
2. A decrease in loan originations and an increase in defaults and foreclosures continued to dominate the downward trend in the housing market in 2008. While the amount of mortgage fraud cannot be precisely determined, industry experts agree that there is a direct correlation between fraud and distressed real estate markets. As the housing market continued to decline in response to an increase in housing inventories, lack of sales, and new foreclosures surface, to include a wave of Alt-A and Option ARM loans due to reset beginning in April 2009, real estate values softened, and fraud reporting increased throughout 2008.
3. Mortgage fraud is higher in states where unemployment and foreclosures are surging. Analysis of available law enforcement and industry information indicates the top states for mortgage fraud during 2008 were California, Florida, Georgia, Illinois, Michigan, Arizona, Texas, Maryland, Missouri, New Jersey, New York, Ohio, Colorado, Nevada, Minnesota, Rhode Island, Massachusetts, Pennsylvania, Virginia, and the District of Columbia. Rhode Island, Massachusetts, Pennsylvania, and the District of Columbia were new to the list in 2008, replacing Utah, Indiana, Tennessee and Connecticut from 2007.
4. The downward trend in the housing market during 2008 provided a favorable climate for mortgage fraud schemes to proliferate. Several of these schemes have the potential to spread if the current economic downward trend, as expected, continues beyond 2009. Increases in foreclosures, declining housing prices, and decreased demand place pressure on lenders, builders, and home sellers. These and other market participants are perpetuating and modifying old schemes, including property flipping, builder-bailouts, short sales, and foreclosure rescues. Additionally, they are facilitating new schemes, including reverse mortgage fraud, credit enhancements, condo conversion, loan modifications, and pump and pay in response to tighter lending practices.
Contact an attorney immediately to see where you are with this, if the investor/Realtor has taken out another loan for the property, and if you can resolve the situation or need to take legal action.