order. The last assignment in the
chain will be to our company
and that’s our proof. It’s always
good practice to record all of your
Assignments and give constructive
notice.”
it for improper purposes, but they use
it before they have permission to.”
Staying Safe When Investing
in Real Estate
Tom Rydberg of 1st Advantage
Mortgage which is licensed in
FL, CA, AZ, IL, MI, and WI, says
“Lender bait and switch can be
tough to identify because there are
many legitimate reasons for terms
to change during the loan process.
Online lenders who advertise
dramatically lower rates than the
rest of the industry should be a red
flag. A history of consumer com-
plaints is certainly an indicator to
watch for too.”
Additionally Rydberg notes
that “Occupancy fraud continues
to be a problem. But it’s not just
borrowers claiming they plan
to occupy a property when they
really intend to rent them out.
Now buyers who plan to occupy
a property are stating they will be
investments so they can use future
rental income for qualifying.” Philip W. Boesch, Jr. of the Boesch
Law Group says, “Fraud comes in
many ugly disguises and each one has
its own story. One all-too-common
theme is when misrepresentations, and
omissions of material facts, induce an
investment in the first place.
Insistence on a real Private Place-
ment Memo, or on projections
prepared by a successful CPA, are
routine protections. But even built-in
protections like that don’t guarantee
that trustees or managing members
won’t put their interests above those
of investors. When a fiduciary engages
in self-dealing, it may be fraud but it’s
not always obvious or easy to catch.
When you suspect things are going
wrong, you can demand to inspect the
records of the business under the ap-
plicable sections of the Corporations
Code. Better still to catch it before it
happens -- we suggest that investor
carefully review the Lexis-Nexis legal
records and social media for anyone
with whom you plan to do business.”
In the New Realm of
Real Estate Crowdfunding SEVEN QUICK TIPS
FOR STAYING SAFE
Gene Trowbridge, Esq. CCIM,
CDEI, of Syndication Lawyers
warns that “One of the largest
areas of fraud I see is the sponsors
of the syndication use the money
of the investors before they break
impounds and have the permission
to use it. Not that they always use 1. Always stay protected with insur-
ance, and title insurance
2. Watch for classic fraud indica-
tors and typical clues i.e. requests to
money directly
3. Use a credit tracker and ID theft
protection service to stay alert to
changes
Mortgage Fraud Trends
4. When it comes to documents –
if it is not true don’t sign it
5. Always investigate who you
are doing business with first via
online reviews, public records
matches, licensing board com-
plaints, copies of ID, and verifi-
able references
6. Always have a great real
estate attorney on retainer, just
in case
7. Stay away from businesses
with inadequate or non-existent
security protocols for your sensi-
tive information
What if I Suspect Fraud?
Fraud is extremely serious. Just
being connected to a business or
merchant who has been engaged
in fraud can bring a lot of stress. If
you suspect fraud run. However,
before filing a complaint do make
sure that your assumptions are
accurate. An accusation of fraud
can lead to businesses being shut
down, many individuals landing in
jail until they can prove they are
innocent, and many children seeing
parents dragged away in handcuffs
at gun point.
This alone will bankrupt many
families and end their careers, even
if they are later proven innocent.
Ask questions and make sure you
are clear about what happened first.
Talk about it with a legal profes-
sional. Then if you are certain there
was fraudulent intent, do protect
others, yourself, and the indus-
try by filing complaints with the
appropriate agencies and depart-
ments.
“Lender bait and switch can be tough to identify because there are many legitimate
reasons for terms to change during the loan process. Online lenders who advertise
dramatically lower rates than the rest of the industry should be a red flag.”