When Fraud Comes Home

“I need to reach out to the city’s financial crime detective unit right away.”

That sentence reads like it comes from one of the many, many fraud stories CU Times covers involving credit union executives and/or employees who try to get away with some kind of fraud scheme.

As I’m writing this, that sentence was said to my face a few moments ago at our front door by our realtor.

I read a lot of mortgage and lending reports each week and we’ve been slowly watching the shifting of the real estate markets from a sellers to buyers to sellers to just not-much-is-happening kind of market. It’s been interesting to watch this even in small pockets of where I live, and notice the drastic difference of trying to and successfully sell a home. Here, 10 minutes from the CUNA headquarters in Madison, Wis., the main difference appears to be anything under $300,000 goes pretty damn fast. If you’re over that price point, the houses just sit there. It’s that weird middle ground of not that cheap and not crazy expensive.

When the house went on the market, I wasn’t worried. But, it has turned into an 11-month project that has become incredibly stressful and absolutely insane.

Eleven months and we can’t seem to give the house away because of exactly three things: No one appears to have enough for a down payment, they can’t get financing or they think the yard is too damn small. To that last reason, I say, get over it. You don’t have to mow much and there’s a park one block up the street.

To the other points, I now fear that the personal finances of so many of us have just never recovered from the Great Recession. And that reason has created a financial fraud problem that’s just starting to hit our area. And that leads me back to my opening sentence.

Last month, we accepted a totally fair offer. The buyer, who I will not name nor will I even give the sex, put down earnest money. The person paid for an inspection. And nothing is wrong with the house.

Utilities were scheduled to shut off here and turn on in a new place 1,200 miles away this week. Movers were ready to go. Everything was moving forward until last weekend when our realtor began to get a funny feeling after the buyer produced a “Proof of Financing” document.

Of note, for better or worse, I’m skeptical of people and their true motivations. And I had been asking our realtor to make sure that the earnest money was there, was legit and everything was fine.

The realtor called the person listed on the “Proof of Financing” document, and I think you see where this is going – the document was fake. From what we can gather and after digging around, the buyer purchased a fake form online. Oh, and the buyer’s check for the earnest money? It bounced and we were not notified.

I like our realtor. She also received a tsunami of profanity coming from my mouth after learning of the news.

From there, I started doing what I do best. I researched the hell out of what was going on.

I’ve spent the past few days doing my own real estate fraud research and it took exactly three Google searches for me to find a site where I could create my own fake “Proof of Financing” form. The site allowed me to create, from a template, the company name, address, contact information, amount to be financed, and to insert the financial institution’s logo and even add a customized letterhead and watermark on the form.

I’m not going to include the site name. But I have included a screenshot of my unfinished document. If I would have finished the document and wanted to use it, it would have cost me less than $5.

What’s amazing to me here, in the year of 2018, is that even the title company blindly accepted the fake “Proof of Financing” form and set up all of the paperwork for the official signing as if it wasn’t all pure crap.

Being in the middle of it all, I can’t seem to grasp how my credit union could have helped with any of this. And I’d like to think that it could.

Instead, I’m getting people sending me names of real estate attorneys and possibly looking at filing a police report. All of it just seems crazy to me and, as with everyone, life is already busy and crazy enough without adding this on top of it. If you know me well, you know that adding too many stressful situations to my days just makes me sleepy.

What is clear to all of us involved in this process of selling a home is that there are still failing safety measures despite professionals with the best intentions working on it.

And the deregulation party happening around the country isn’t helping any of us feel better about future potential sales or offers on the home.

I’m too mad at myself and the system to propose any kind of solution to this problem. Our realtor and her real estate company has never seen this kind of fraudulent behavior before. Therefore, no one has an answer for how to stop this from happening again. The other thing that is clear is other realtors aren’t doing their due diligence to check their client’s history (this buyer had previous criminal charges), the title company functions on trusting a piece of paper and it is incredibly difficult to untangle moving plans.

Sometimes people just suck. And when you combine sucky people with a flawed system, you get shafted.

For now, there’s another open house this weekend.

Michael Ogden is executive editor for CU Times. He can be reached at mogden@cutimes.com.