Have Terrorists Found a New Way to Raise Big Bucks?
There's a new scam in town. Terrorists may be using frustrated homeowners as shills to raise money for their nefarious activities. And it's happening in quiet, affluent neighborhoods in middle America.
This is how it works. Targeting new or newer homes in affluent suburbs that have languished on the real estate market for months, interested buyers offer to pay hundreds of thousands of dollars more than the asking price. The catch? "Sellers must agree to immediately refund the difference between the asking price and the sale price," Geoff Dutton reported this week in an exclusive story in the Columbus Dispatch (click the link to read the whole article).
What could be wrong? The buyer gets his asking price. The seller gets the home and immediate cash to use for "home improvements." The problem? The homes are still sitting vacant months after purchase, and many of the buyers have disappeared -- with the cash. Those that could be found offer little explanation.
The unusual deals are happening in some of central Ohio's most prestigious communities. "At least 14 such deals worth more than $11 million have closed since spring, and the offers continue," Dutton wrote. Consistently the deals involved loans of $250,000 beyond the agreed price with little or no down payment. Because most of the buyers have been Middle Eastern, suspicious realtors called the FBI and Department of Homeland Security which are investigating. Reputable realtors, lawyers and title agents have advised sellers to reject the offers. "We've turned down five of them," said Bryan Wing, executive vice president of CV Perry Builders. "Believe me, in this day and age, we could have used it." Other cash-strapped sellers couldn't resist.
"There's nothing improper about borrowing more than the asking price of a house," Dutton noted. "But dishonest buyers or deal-makers can take mortgage money and walk away from a house, never repaying the loan. It's been a growing problem nationally for lenders and neighborhoods. The FBI says banks reported losing $1 billion to mortgage fraud last year, more than double the previous year."
What's happening in central Ohio seems more sinister than mortgage fraud. It's happening in wealthy upscale neighborhoods, involves hundreds of thousands of dollars and a small cadre of Middle Eastern buyers often making multiple purchases, and the deals and deal-makers are shrouded in secrecy. With the housing market glutted with unsold homes, frustrated sellers make an easy target and someone is cashing in. Sounds like terrorists have found a new way to raise cash.
This is how it works. Targeting new or newer homes in affluent suburbs that have languished on the real estate market for months, interested buyers offer to pay hundreds of thousands of dollars more than the asking price. The catch? "Sellers must agree to immediately refund the difference between the asking price and the sale price," Geoff Dutton reported this week in an exclusive story in the Columbus Dispatch (click the link to read the whole article).
What could be wrong? The buyer gets his asking price. The seller gets the home and immediate cash to use for "home improvements." The problem? The homes are still sitting vacant months after purchase, and many of the buyers have disappeared -- with the cash. Those that could be found offer little explanation.
The unusual deals are happening in some of central Ohio's most prestigious communities. "At least 14 such deals worth more than $11 million have closed since spring, and the offers continue," Dutton wrote. Consistently the deals involved loans of $250,000 beyond the agreed price with little or no down payment. Because most of the buyers have been Middle Eastern, suspicious realtors called the FBI and Department of Homeland Security which are investigating. Reputable realtors, lawyers and title agents have advised sellers to reject the offers. "We've turned down five of them," said Bryan Wing, executive vice president of CV Perry Builders. "Believe me, in this day and age, we could have used it." Other cash-strapped sellers couldn't resist.
"This has been a really recent phenomenon," said David Martin, chief executive of Stewart Title. "It's like a whole new industry has formed overnight." With no one talking -- not the realtors, lenders, FBI or Homeland Security -- it's hard to know what's going on. Is this part of a terrorist plot or just some new investment scam?
"There's nothing improper about borrowing more than the asking price of a house," Dutton noted. "But dishonest buyers or deal-makers can take mortgage money and walk away from a house, never repaying the loan. It's been a growing problem nationally for lenders and neighborhoods. The FBI says banks reported losing $1 billion to mortgage fraud last year, more than double the previous year."
What's happening in central Ohio seems more sinister than mortgage fraud. It's happening in wealthy upscale neighborhoods, involves hundreds of thousands of dollars and a small cadre of Middle Eastern buyers often making multiple purchases, and the deals and deal-makers are shrouded in secrecy. With the housing market glutted with unsold homes, frustrated sellers make an easy target and someone is cashing in. Sounds like terrorists have found a new way to raise cash.
You wrote:
"What could be wrong? The buyer gets his asking price. The seller gets the home and immediate cash to use for "home improvements." The problem? The homes are still sitting vacant months after purchase, and many of the buyers have disappeared -- with the cash. Those that could be found offer little explanation."
Buyer and seller seem to be flipped in the sentence "The buyer gets his asking price. The seller gets the home and immediate cash to use for "home improvements." a common mistake.
Posted by Maureen | Tue Nov 21, 08:54:00 AM EST