NEW YORK – July 13, 2012 – Each time the real estate industry changes, scam artists find a new way to commit fraud. In the latest scheme, they manage to duplicate short sale approval letters for extremely low amounts, enabling a buyer to pay far less than the property is worth. The letters are well-done forgeries with Bank of America’s logo, formatting and language.
Bank of America seems to have the most problems, and the company issued a warning recently.
While the fraud can vary between transactions, it many times involves a third-party that’s handling the short sale for the seller. In an example cited by Fidelity National Financing, a buyer, seller and Bank of America appeared to agree on a short sale price and deadline for closing. However, the buyer and seller needed a few more days, and the closing agent called Bank of America to request an extension.
When the extension approval came through from Bank of America, however, it didn’t look right. The closing agent called the bank and eventually found out it was faked. Both the buyer and seller then disappeared. Funds for closing already received on behalf of the seller by a private lender were returned.
According to Bank of America, the $200,000 price approved by the fraudulent short sale letter applied to a home with a mortgage in excess of $1 million.
To minimize future problems, Bank of America says it will add the following wording wording to all short sale approval letters:
“Bank of America appreciates all of your efforts and cooperation in this matter. If you have any further questions, please contact our Short Sale Customer Care Department at 1-866-880-1232, Option 1.”