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How Legal Professionals Can Use Data in Cases of Real Estate Fraud

May 07, 2019  //  BY DataTree Support Team

In a perfect world, everyone would be honest and above-board at all times, including during real estate transactions. Unfortunately, we do not live in that world — at least not today. There are crooks who will commit all types of fraud, including when buying or selling a property.

Real estate fraud is when one person or party will misrepresent or use false information to take advantage of another during a real estate sale or purchase. In many cases, real estate fraud involves a type of mortgage loan fraud, but it can also rear its ugly head at any time during the transaction, including during the appraisal process, closing and more.

In general, real estate fraud can be divided into two categories: lender fraud and borrower fraud. In the case of lender fraud, this can involve misrepresenting property info, or lying about professional licensing. When borrowers commit fraud, it often involves falsifying info on the loan applications, fibbing about credit score and leaving out important bits of info during the transaction.

Scammers have also figured out how to target people who are buying homes — often through a form a cyber crime. In fact, notes Forbes, cyber crimes have become so common, the FBI has launched an Internet Crime Complaint Center with the nickname of IC3 to deal with these issues. From 2015 to 2017, there was a 1,100 percent rise in the number of email account and business email compromise victims that reported a crime with a real estate transaction angle. In all, the IC3 reported that there were over 9,600 victims of real estate fraud in 2017.

The way this crime typically takes place is that a cybercriminal will hack into a home buyer’s email and monitor it — when the crook sees an email that looks like the home transaction is coming up soon, he or she will send the buyer an email that looks like it’s coming from the agent asking the buyer to wire money for the purchase to an account belonging to the criminal. 

In addition to the IC3 website where people can report their stories about real estate fraud, the FBI also has a website devoted to the topic; spend just a few minutes scanning through the headlines and it’s clear to see how common and worrisome this type of crime has become. A recent story tells the tale of three men from New Jersey who were arraigned on charges of mortgage fraud; another recounts three men from Massachusetts who have been pulling mortgage fraud schemes for years.

Real Estate Fraud Schemes: How Big Data Can Help Your Case

In the proverbial smorgasbord of real estate fraud cases that may cross your path as someone in the legal field, there are definitely specific types that will benefit from the use of big data. Consider the following examples:

Land contract fraud - This happens when one party misrepresents the total value or worth of a property or misrepresents the title or deed. To help bolster a case against someone who is accused of this type of real estate fraud, big data can help immensely. For example, valuations that include a condition report, evaluation of a property and its market value will give you the true and accurate worth of the real estate in question. Property reports including the title, deed and more are also available and will help in cases like these.

Predatory lending - If a home buyer has been the victim of predatory lending, he or she may have unwittingly accepted unfair loan terms or they have been forced into accepting loan terms that the borrower cannot afford. Using big data can also help in these cases; for instance, accessing current and past mortgage information for the property.

Misrepresentations of the property - When a seller lies about the home size, lot size or other information, legal professionals can use a property map search feature to quickly look up the specific property and see the recorded the true information, including building size, number of bedrooms and bathrooms, lot size and more.

DataTree Helps with Due Diligence and More

For busy legal professionals who are helping clients who are victims of real estate fraud, it is imperative to get access to accurate property data as quickly as possible. DataTree is a one-stop shop for this type of information and more — thanks to our innovative search tools and state of the art technology, you can do a number of advanced property searches to help you and your case. To help perform due diligence for real estate fraud cases, legal professionals are also welcome to explore the intuitive and innovative DataTree platform to see what types of information is readily available for them to use.


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