Scam Alert! Offshore Internet Scam Involving Phony Buyers Attempting to Tap Into Owner's Home Equity Line of Credit

Consumers and Real Estate industry professionals alike should be aware of yet another offshore fraud scheme involving a phony buyer and fraudulent efforts to tap into a Seller's home equity.  This one came to the attention of one of our agents from an Internet lead on one of our company websites.

I would like to thank Brian Langhorst and Meghan Barry of LuxuryRealEstate.com for their assistance and advice in learning more about this type of fraud attempt.

One of our agents reported that he was contacted by this scammer two days ago.  The scam artist behind this type of fraud scheme uses a Yahoo.com email address, which is virtually untraceable.  The phony phone number provided by the author of the scam email was a fourteen-digit international number with a nonexistent country code.

The fraud email starts out with an inquiry if a particular property is still available.  The email to our office mentioned a property priced at around $500,000 which happened to be a vacation cottage on Lake Superior.  The writer continues by informing the recipient that he represents a Buyer who has the financial capacity to purchase the property and would like to do so immediately.

The scammer then requests that the Seller open an Equity Line of Credit (HELOC) account and requests the account number, financial institution name and address of property securing the Line of Credit.  The "Buyer" offers to transfer a sum (in excess of the purchase price) to the Credit Line account, with the request that the recipient then send the difference to a third party who will "decorate the home to the tastes of the buyer and perform any necessary minor remodeling" requested by the Buyer prior to closing.  The scammer further requests the last four digits of owner's SSN, the owner's date of birth, the available credit amount for the HELOC, the amount already used (if any) and how long it has been open.

If any of you encounter this, or any similar attempts at real estate fraud, we encourage you to report it to the appropriate State and Federal authorities.  These would include your local FBI office, the local or regional office of HUD for your area, your State Attorney General's office and the Real Estate governing body for your State.