With the incredible slow-down in the real estate industry, one of the biggest problems for banks, lenders and local governments is the massive volume of paperwork associated with problem properties. And, not surprisingly, where there is a paperwork problem, there are now also con artists making the best of a bad situation – literally. One new scam involves identifying deserted properties that have been through the foreclosure process and are bank-owned. Once the scammer has identified the property, he or she submits fraudulent title documents to the local County Recorder of Deeds, essentially registering a fake owner. Once the title issue is resolved – for the time-being – the fraudster breaks and replaces the locks and then rents the property out until the bank figures out that the place is inhabited and fixes the paperwork and, in some states, evicts the tenant.
With foreclosures themselves taking nearly two years to complete, banks are swamped with paperwork already. Do you think that they should try working with people who want to manage their properties in a formal way to avert this kind of scam?
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