Fraud in Real Estate Investment

I have been hearing whispers and rumors of an investment fraud being formulated here in Southern California and Riverside.

The fraud works like this:

Get investors who dump large sums of their money into purchasing property. The investment company holds title while the investors have their name on the mortgage - are you seeing a slight problem?

If and when things go south - the investors loose their money and the homes and their credit because they do not hold title of these homes. They are the ones to take the fall on the mortgage issue - because it is their name on the mortgage not the title. If payments are not made it is the investors who loose out - not the people actually doing the fraud.

It works because the "company" gets people to "invest" 401K and other monies into purchasing a home(s). The "company" promises to get renters into these homes - there by allowing the "investors" to make a return and to make the mortgage payments - while the "company" holds title.

The problem is - the "Company" gets their own appraiser to appraise these homes for a much higher value than they are worth - and the "sales staff" from the company get to keep the overage as a "commission" and the "investors" pay far more than the homes are worth.

All of the overages are paid back to the "company" and it's "sales staff" as salary, etc.

When the market goes south - which it did,..these people lost these homes because THEY DID NOT HOLD TITLE! These investors just held the mortgage in their name.

Scary thing is title companies did not have to report nor are they required to report this behavior - as decided by a judge- WHAAAAAAAAAT?! Yep, a judge ruled that a title company has no obligation to report fraud or to police - so that these "Investment Companies" continued their scam on unsuspecting investors.

Okay People, You have heard me say this over and over and over again. When you buy Real Estate you need to work with a Realtor! I/we help protect you from things that are BAD!

Remember when you heard, "If it's To Good To Be True - It Probably Is."

I work hard to protect clients from even stepping foot into homes or situations that have any touch of unethical behavior or fraud.

Think about this next time you are considering purchasing property. You ALWAYS need/want someone to look after your interests and to protect you. Saving a few bucks by not paying someone to protect your interests can end up costing you hundreds of thousands of dollars in loss later on.


Funny thing is - one of the staff from one of these companies contacted me quite awhile ago - and even then I knew this was something I wanted nothing to do with. The sad thing is many investors lost everything - by participating in this scam.

There is a list of companies posted on a website - I will not/cannot post it here because of legal reasons but be sure you drop in and check out the list of companies and staff just to be aware and knowledgeable.

-->http://www.coreclient.110mb.com/page3.html

Be wary when you buy property where you just hold the mortgage only and an investment company holds the title - ALWAYS consult a attorney who is practiced in how you can hold title before you blindly do what some one tells you. ALWAYS have a Realtor on your side.

Life is hard enough sometimes,..do not do something stupid and make it so hard it destroys your entire life and all that you have worked so hard to build.

Ken Webb - Realtor/Agent
OCAR, NAR, CAR
F1RST TEAM
Real Estate
Email: kenwebb@firstteam.com
Phone/Text: (949) 243-6649
DRE Lic # 01844181

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