While we all are concerned about cybercrime and identity theft, it appears taking someone’s money the old-fashioned way has reappeared in a short sale scam in Southern California. The alleged scam appears to follow the same basic format. A short sale agreement is entered into and the buyer makes an initial deposit ranging between $5,000 and $15,000 into the listing broker’s non-independent broker escrow. Due to the nature of short sales, after approximately four to six months, the selling agent checks in with the listing agent and is assured that the listing agent is working towards lender approval. At that point, communication slows down and the selling agent begins to get concerned and calls the listing broker’s escrow company. There is no answer and no return call and no other number to contact.
A case has been opened with the Long Beach Police Department, Financial Crimes Division. The officer in charge is Det. Robert Ryan (562) 570-7391. As of late December, there were approximately 20 victims. However, the C.A.R. Legal Hotline has received more than 10 calls since the first of the year which have been referred to the Long Beach Police. The California Bureau of Real Estate also is aware of this scam.
Additionally, the Los Angeles County Sheriff has made an arrest in what appears to be an identical scam involving at least 32 victims with a total loss of $498,000. To contact the L.A. Sheriff’s office call Det. Keith Clark at (562) 946-7217. Tips also can be made anonymously with Crime Stoppers by calling (800) 222-TIPS (8477).
If you believe you or your buyer have fallen victim to this alleged scam, contact the police and the Bureau of Real Estate.
To protect short sale buyers, remember to include a Short Sale Addendum (C.A.R. Form SSA) in the offer. The default agreement in the SSA is that the buyer is not required to submit any earnest money deposit to escrow until three days after receiving all short sale lenders’ written approval.