KLAS-TV Channel 8 News Las VegasMortgage Fraud Ring Dupes Las Vegas Home Sellers
The FBI has identified Nevada as one of the top ten mortgage fraud hot spots in the nation.
According to the FBI mortgage fraud costs lenders more than $1 billion a year.
So, what if someone offered you hundreds of thousands of dollars more than your asking price on your home right now, even in this dismal housing market.
It may sound too good to be true but home buyers eager to sell are getting dragged into a ring of local mortgage fraud.
A man we will call Jeff got an offer for way above the asking price for his house. He won't show his face because he's afraid there's something shady going on.
"My realtor came to me, they said they are just kind of strange, they want a whole lot of money back at closing," Jeff says.
The buyer wants $120,000 at closing.
"It's a scam," Scott Gillespie, Republic Mortgage loan officer, says.
Gillespie says a buyer is never supposed to get cash back - especially not hundreds of thousands of dollars.
"It's a scam to put money in their pocket, they make no payments and that is how they have made their money."
The conspiracy starts with the realtor who identifies a low priced property. The appraiser, who's also in on the scheme, inflates the value on paper. Then the broker, who's in on it too, combines all the fraudulent information into a loan application and submits it to the lender.
"If the broker is not being honest the broker is weeding out the information that just makes the transaction look open and honest and is providing the end lender with just enough to make it look like it is an up and up deal," Gillespie says.
They tell the lender the extra money is for repairs but once the deal is closed they never pay the mortgage and walk away with the cash.
"Could the seller be dragged in? They could," Gillespie says.
After Eyewitness News told Jeff what was going on, he asked us not to show his face and said he would drop out of the deal.
