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By Jason Murphy
Georgia real estate properties translate into fraud
opportunities and baits for many unscrupulous individuals
trying to lure prospective buyers and victims in the Georgian
landscape. From 2002 to 2005, Georgia is a consistent
topnotcher among mortgage and real estate fraud cases in the
US
documented by TPG or The Prieston Group. It is therefore not
surprising that despite the beauty of Georgian properties, the
real estate industry of Georgia continues to suffer setbacks
brought by fraud.
According to the Prieston Group, a fraud protection and
prevention group, there's a number of ways in which fraud can
be committed. The types of fraud operations preying on Georgia
real estate investors include occupancy fraud, false rent
verifications, appraisal fraud, broker fraud, investment
schemes, and identity theft. Among these, 48% of the claims
from Georgia are filed as occupancy fraud. It occurs when a
mortgage borrower knowingly misrepresents the intention of
living in the property in a ploy to obtain lower mortgage
rates. It does not matter whether the borrower is the owner of
the property, an investor after lower financing costs, or a
con
artist attempting to get away with fraud. Fraud is still
fraud,
and the local Georgian government is pushing for more
stringent
measures to lower the state's fraud ranking and protect it's
real estate industry.
The state upholds the Georgia Residential Mortgage Fraud Act
which names misstating, omitting, and misrepresenting facts
and
intentions in real estate deals as criminal acts. Mortgage
felony of this nature merits a 10-year jail term and fines
amounting to $100000. Although there is wide appreciation for
the mortgage fraud policy, there are some parties that see
problems in upholding the policy. They claim that lenders
unaware of the borrowers' fraudulent intentions are also
criminally liable. Michael Brook, a specialist in mortgage
law,
counters the claim by stating a policy provision that states
that lenders are allowed to be defendants to plead their cases
in the event that they are involved in fraud cases. In
addition
to the lenders, appraisers, brokers, real estate agents, and
investors are possible defendants in a fraud case. He asserts
that the stringency of the new policy makes committing frauds
more difficult which discourages potential lawbreakers. He
also
claims that the move by Georgia serves a paradigm for other
states. At present four more states are upholding similar
laws,
and California, another real estate hotspot is considering to
adopt a similar policy.
The Georgia Residential Mortgage Fraud Act continues to boosts
the real estate industry of state. Despite the mix of
reactions
regarding the new policy, there is no doubt that it minimizes
risks of fraud in investing in Georgia real estate properties.
Finally, hopes for the redemption of Georgia as fraud hotspot
are high in the near future. The state looks forward to more
real estate investors and the revival of its industry.
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