USA Today had an article on how easy it is for con artists to steal your home out from under you. I’ll quote one of them here, but it’s worth your time to read the whole article. I’m especially concerned because people who want to make some money “working from home” could easily respond to an online ad looking for folks to “make money in real estate” and get caught up in this, especially retirees who are hurting for cash.
Say a real estate investor came to you and told you banks wouldn’t let him buy any more property because his credit was maxed out. But if he could buy a property in your name, he’d give you $1,500 to $2,500 for the trouble of signing the documents.
He’d pay all the costs and either find a tenant to cover the mortgage or pay it himself. And after a year, he’d sell the property and share the profits with you. Sound good? If you said yes, you’d be what criminals and the FBI call a straw buyer.
Not all of them lost money. Barber paid some straws after he flipped the properties, documents show. But in the end, many of Barber’s straws were stuck with empty, decaying properties and mortgages they couldn’t afford.
Lenders suffered losses on 205 of the 283 properties in the case, according to court documents. Marshall says most of the straws lost their properties to foreclosure or signed them over to the lenders to avoid foreclosure, and several filed for bankruptcy protection.
Elderly people make attractive prey, Barber says. They tend to have low bills, high credit scores and all the documentation banks need.
“You say: ‘Look you’re not really going to owe money. It’s going to be my house, or the tenants are going to be making payments. … The rent is $500, and the payment is $300. By signing here, you’re going to get the difference,” he explains.
One of Barber’s straws, Elvin Barton, told the judge, “I’m 70 years old, and because of him I have to start all over. … Mr. Barber gained my trust through manipulation and used my good name and credit to add to his wealth. Mr. Barber never intended to live up to his promises, leaving me with six foreclosed homes. I could not make the payments.”
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