There's a new game in town, the Cash-Back Mortgage scam and it's rampant according to Nancy Hogan, the former head of the Florida Real Estate Commission. Here's how it works.
- Willing Property Appraisers, Real-Estate Brokers and Accountants collude to draw-up fake income statements and tax returns.
- They recruit people with good credit histories to serve as decoys or "straw-buyers" in a real estate deal.
- The price of the property is then inflated to secure the biggest loan possible.
- They pay the sellers the original price and then pocket the excess money as a "cash-back" on closing.
- The decoy is paid off.
- The property is then abandoned to foreclosure.
I guess that these folks were never made for climbing the tree of integrity!