SHORT SALE ALERT!

//SHORT SALE ALERT!

By Joann Prinzivalli

One of our underwriters has circulated a memo advising of a fraudulent short sale scheme involving Bank of America mortgages.  Bank of America has implemented procedures to address the fraud scheme.

When representing a buyer or a seller on a short sale, lawyers must be aware of the number of scams and frauds that are out there – and it is possible for attorneys as well as clients to be victimized by these unscrupulous operators.

Bank of America alerted our underwriter that a short sale scam was being perpetrated involving properties where Bank of America is the mortgage holder. Bank of America indicated that the perpetrators of the scam send approval letters to title companies that mimic legitimate approval letters from Bank of America, including the bank’s logo, formatting and language.

In order to thwart the scamsters, Bank of America has updated its existing short sale approval procedures. On short sales where the original principal amount of the loan was in excess of $500,000 all Bank of America approval letters will now contain the following statement:

“Bank of America appreciates all of your efforts and cooperation in this matter. If you have any further questions, please contact our Short Sale Customer Care Department at 1-866-880-1232, Option 1.”

The letter from Bank of America goes on to say that if that number is called that Bank of America will verify the following information with the caller:

  1. Loan Number;
  2. Property address;
  3. Closing deadline date;
  4. Original borrower’s name;
  5. Approved buyer’s name;
  6. Short Sale price amount; and
  7. Net proceeds amount to Bank of America.

While our closers will be making such confirmation calls at the closing, it’s important that attorneys be aware and take a precautionary approach.  We anticipate that the scammers might mimic the new Bank of America procedure, but will provide other numbers to call than the one noted in this alert – if you are involved in a short sale closing, make sure that the letter you obtain has the correct number, before the closing.  Closing delays can occur if a scam is detected.

2017-06-30T18:58:49+00:00