Crooks always look for a new wrinkle, and short-sale scams are quickly moving to the top of the fraud world.
According to a new study just released by CoreLogic, short-sale fraud is expected to rise 25 percent in 2011 with lenders and servers incurring losses in excess of $375 million. The primary states of concern are California, Arizona, Colorado and Florida.
However, short-sale fraud is also popping up in other states. Deb Bortner, director of consumer services for the Washington State Department of Financial Institutions, was one of many state officials to say there was anecdotal evidence that short-sale fraud is on the rise.
A short sale is a real estate transaction in which the borrower, being unable to pay the mortgage on the property, is permitted by the lender to sell the property "short of" — or less than — the total amount due. Hence, the lender accepts a loss.