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Real Estate Fraud Insurance: A Necessity

Posted on: October 10, 2016 by Newmark Insurance

Real estate agents are no strangers to exposures. With their history of grand fraudulent schemes real estate agents are even more vulnerable to accusations of fraud. Schemes such as identity theft, loan sharking and more have affected the industry. Real estate professionals need to secure themselves and their operations with a customized Real Estate Crime and Fidelity Insurance policy.

As federal investigators have identified a significant increase in unlawful activity, real estate professionals are required to take the proper precautions to ensure lawful practices. Some common schemes include the following:

Home Flipping-  Technically this is a legal practice. It is important for buyers who purchase homes for a small amount and then revamp them to sell at a higher cost, to be diligent and truthful when providing lenders with financial statements. Real estate agents who are managing the sales of these homes should be mindful of this and ensure proper communication as well as documentation.

Disagreements on Settlements- According to the Internal Revenue Service, this occurs when one settlement statement is prepared and provided to the seller accurately reflecting the true selling price of the property. Then a second fraudulent statement is given to the lender showing a highly inflated price. Typically, when the loan money is dispersed, the fraudulent conspirators all take a portion of the funds.

Qualifications Fraud- This results when an agent misrepresents the applicant’s financial information in order to make them appear more qualified for the home than they are. Forging income and credit information is a common offense and can land agents in hot water.

At NewMark Insurance Services, we are dedicated to protecting real estate businesses like yours. With our expert knowledge of the field, in combination with our competitive solutions, we’ll find a solution that’s best for you. To learn more about our operation, contact our knowledgeable specialists today at (855) 777-6549.

 

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Posted in: Crime and Fidelity Insurance