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Real Estate Industry

June 22nd 2005

MORTGAGE FRAUD IS HOT IN QUEENSLAND

Hundreds of crimes and no one seems to care.


by Tim O'Dwyer


An old scam with new scammers is rife in Queensland (and probably elsewhere, too).

It's the "double contracting scam" where a first sales contracts is drawn-up with "loaded" or "jacked" prices - way above the real sale prices. This is the contract shown to the lender.

Second contracts, which lenders never see, are prepared at a lower price.

Like thieves gathering around a bag of loot, the chortling scammers –mortgage brokers, agents, valuers, buyers, sellers and, of course, lawyers (all good scams need a bent lawyer or two) – set up their neat little lending sting to dud the lenders with the fake sale prices.

Some time ago, a mortgage broker, a solicitor, an estate agent and two salespeople were jailed for this sort of fraud. Such a result is pretty rare. Which explains why so many new scammers have become involved in this criminal act. No one seems to care.

Recently, I told the Police about three sales involving potentially fraudulent "jacked" contracts. Because agents were involved, the police passed the buck to Queensland's Office of Fair Trading.

So far, the Consumer Cops have done what they do best - nothing.

One Queensland valuer claims to have seen 400 cases of "double contracting" in the past nine months. He has given up notifying the police or Fair Trading. "There's no point," he says.

Sadly, I agree with him. Mortgage fraud is hot in Queensland.

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