PH. +44 7801 536104

Unmasking the Dirty Trick: What Type of Crime Is Equity Skimming Considered?

Post date |

Hey there, folks! If you’ve ever wondered how low some scammers can go lemme tell ya about a nasty little scheme called equity skimming. It’s the kinda thing that makes your blood boil—preying on folks who are already down on their luck facing foreclosure, and desperate to save their homes. So, what type of crime is equity skimming considered? Straight up, it’s a form of real estate fraud, often pinned down as mortgage fraud, and it’s as illegal as it gets. At its core, it’s about deceiving homeowners and pocketing cash while leaving ‘em high and dry.

We’re all about breaking down the sketchy stuff on the internet so you can stay safe. In this in-depth look, we’ll talk about what equity skimming is, how these thieves do it, how terrible it is for victims, and most importantly, how you can spot and avoid this scam. Do not leave us now, because you do not want to learn this the hard way.

What Exactly Is Equity Skimming? Let’s Break It Down

Picture this you’re behind on your mortgage, the bank’s breathin’ down your neck, and you’re one step away from losin’ your home. Then, outta nowhere, some smooth-talkin’ “investor” or “buyer” shows up, promisin’ to save the day They say they’ll take over your payments or even pay you big bucks later if you just sign over the title to your house. Sounds like a lifeline, right? Wrong That’s the setup for equity skimming, and it’s a trap.

Equity skimming is when someone—let’s call ‘em a scammer ‘cause that’s what they are—gets control of a property usually from a homeowner in financial trouble. They might buy it cheap or trick the owner into handin’ over the deed. Then, instead of fixin’ up the place or payin’ the mortgage like they promised, they rent it out, collect all that sweet rent money, and don’t pay a dime to the bank or for taxes. They keep this up until the property goes into foreclosure, then they vanish with the cash, leavin’ the original owner or the lender with a mess.

This ain’t just shady—it’s straight-up fraud. Specifically, it falls under real estate fraud because it involves deceivin’ people in property deals, and more often than not, it’s tagged as mortgage fraud since the scammer messes with mortgage payments (or rather, doesn’t make ‘em). It’s a crime that exploits trust and desperation, and the law don’t take kindly to it.

How Does Equity Skimming Work? The Dirty Details

Now that we got the basics, let’s get into the nitty-gritty of how these con artists operate. It usually starts with a homeowner who’s in deep trouble—maybe they lost their job, got hit with medical bills, or just can’t keep up with the mortgage. That’s when the vultures swoop in. Here’s a typical playbook for equity skimming, step by sneaky step:

  • Targetin’ the Vulnerable: Scammers look for folks facin’ foreclosure. They might cold-call you, send sketchy flyers, or even knock on your door with a too-good-to-be-true offer.
  • Sweet-Talkin’ Promises: They’ll say stuff like, “Don’t worry, I’ll take over your payments,” or “Sign the house over to me, and I’ll pay you a fat check when it sells.” Sometimes, they ask you to stay in the home as a tenant and pay rent to them.
  • Gettin’ the Title: Here’s where it gets dicey. They convince you to sign over the deed or give ‘em power of attorney over your property. They might say it’s just temporary or no big deal—don’t fall for it.
  • Rakin’ in Rent: Once they got control, they rent out the place (sometimes even if you’re still livin’ there payin’ rent to them). Every penny goes into their pocket.
  • Skippin’ the Mortgage: They don’t pay the bank, don’t cover taxes, and don’t fix a darn thing. They just let the property slide into foreclosure while they milk it for all it’s worth.
  • Ghostin’: When the bank finally forecloses, the scammer’s long gone with the cash, and you’re left with nothin’—no home, no money, and a trashed credit score.

It’s a cold-blooded scheme, y’all. These folks don’t care if you lose everything; they’re just in it for a quick buck.

Equity Skimming vs. Equity Stripping: Ain’t They the Same?

You may have heard of equity stripping and been wondering if it’s the same thing. Nah, they’re different beasts, though both are illegal and slimy. Let me clear this up real quick:

  • Equity Skimming: Focuses on collectin’ rent without payin’ the mortgage. The scammer takes over the property, pockets rental income, and lets it go to foreclosure. It’s all about fraud through deception in real estate deals.
  • Equity Stripping: This is more about drainin’ the value of a property by takin’ out multiple loans against it. The scammer uses the loan money for themselves, leavin’ the property worth less than what’s owed on it.

Both mess with a homeowner’s equity—the value you got in your home—but skimming is tied to rent scams and foreclosure, while stripping is about over-borrowin’. Either way, they’re crimes under the fraud umbrella, and both can land the perp in hot water.

Examples of Equity Skimming: Real-Life Shady Moves

To really get how this crime plays out, let’s walk through some common ways scammers pull off equity skimming. These ain’t just hypotheticals; they’re the kinda tricks folks have fallen for time and again.

  • Rent Without Payin’ the Bank: A scammer gets a mortgage in your name or takes over your property with a promise to handle payments. They rent it out, keep the rent, and never pay the lender. When the bank forecloses, you’re outta a home, and they’re outta sight.
  • Fake Sale Shenanigans: They convince you to “sell” your house to them, but they don’t officially transfer it to their name. Instead, they keep collectin’ rent from tenants while the property heads to foreclosure.
  • Bogus Refinance Deals: The scammer talks you into refinancin’ your home, sayin’ they’ll use the money to pay off the old mortgage. Spoiler: they pocket the cash and let the house slip away.
  • Phony Lease-to-Own Offers: They offer to lease your property with an option to buy later. You think they’re payin’ the mortgage while rentin’ it out, but nah—they keep the rent and ignore the bank ‘til it’s too late.

These tricks often come dressed up as “foreclosure rescue” plans. If someone’s pushin’ you to sign over your home without a clear, legal process, run the other way, my friend.

What Type of Crime Is This, Legally Speakin’?

Anyway, let’s get back to the main question: what kind of crime is equity skimming? As we already said, it’s definitely real estate fraud, and more specifically, it’s usually called mortgage fraud. Because they are lying to someone, usually the homeowner or the lender, about how they will use the property and mortgage payments to make money for themselves.

But wait, there’s more layers to it. Dependin’ on how the scam is pulled off, it might also overlap with other criminal charges like:

  • Grand Larceny: Stealin’ a big chunk of money or value through the scam.
  • Embezzlement: Misusin’ funds (like rent money) that were supposed to go somewhere else.
  • Fraudulent Conveyance: Messin’ with property titles in a deceptive way.

Equity skimming is a very bad thing to do, no matter how you look at it. People who commit scams can go to jail, pay fines, make restitution, or be sued by the people they’ve hurt. It’s not just a civil dispute.

The Fallout: What Happens to Victims and Scammers?

This crime don’t just hurt one person—it’s a wreckin’ ball for everyone involved, ‘cept the scammer (until they get caught, that is). Here’s the damage it does:

For Homeowners (The Victims)

Man, this is where it gets heartbreaking. If you fall for an equity skimming scam, you’re lookin’ at:

  • Losin’ Your Home: Foreclosure happens when the mortgage ain’t paid, and you’re out on the street.
  • Equity Gone: Any value you had built up in your property? Kiss it goodbye.
  • Credit in the Toilet: Foreclosure tanks your credit score, makin’ it tough to rent or buy again.
  • Legal Headaches: You might face eviction or struggle to prove you even own the place anymore.

For Scammers (The Bad Guys)

Don’t think these crooks get off easy if they’re nabbed. The law can throw the book at ‘em with:

  • Criminal Charges: Fraud, larceny, or embezzlement can mean jail time.
  • Civil Lawsuits: Victims or lenders can sue for damages.
  • Fines and Restitution: They might have to pay back what they stole, plus penalties.
  • Reputation Ruined: Good luck doin’ business again with a rap sheet like that.

For Lenders and the Market

Even the banks and legit property folks feel the sting. Foreclosures mess up their books, and clouded titles—where ownership ain’t clear—can make properties unsellable or stuck in legal limbo. It’s a mess all around.

How to Spot Equity Skimming Before It’s Too Late

Now that we know how brutal this crime is, let’s talk defense. You don’t gotta be a legal eagle to spot a potential scam. Here’s some red flags to watch for if someone’s approachin’ you about your home:

  • They promise to “save” you from foreclosure but don’t offer cash upfront—just big payouts “down the road.”
  • They push you to sign over the deed or give ‘em power of attorney without a lawyer lookin’ at it.
  • They say, “Pay me rent, and I’ll handle the mortgage,” but won’t show proof of payments to the bank.
  • They don’t wanna get the property appraised or inspected—too much hassle for their quick con.
  • They pressure you to act fast, sayin’ there’s no time to think or consult anyone.

If any of this smells fishy, trust your gut. These folks thrive on rushin’ you into bad decisions.

Protectin’ Yourself: Tips to Keep Scammers at Bay

We ain’t just here to scare ya—we wanna arm you with the know-how to keep your home safe. If you’re strugglin’ with mortgage payments or facin’ foreclosure, here’s what to do instead of fallin’ for a skimmer’s lies:

  • Reach Out for Real Help: Call a foreclosure hotline or counselor in your area. They can connect you with legit resources to save your home.
  • Talk to Your Lender: Banks often have options like loan modifications if you’re behind. Don’t hide from ‘em; be upfront.
  • Get a Lawyer’s Eyes on It: Never sign over your property or agree to weird deals without a real estate attorney checkin’ it out. Yeah, it costs a bit, but losin’ your house costs more.
  • Check Out Anyone You Deal With: Research the person or company offerin’ help. Look for reviews, ask for references, and see if they’re legit.
  • Don’t Sign Under Pressure: If someone’s rushin’ you to sign papers without readin’ or understandin’ ‘em, walk away. Ain’t no deal worth that risk.

What If You’re Already a Victim? Don’t Give Up

If you’re readin’ this and thinkin’, “Crap, I think this happened to me,” don’t panic just yet. There’s steps you can take to fight back:

  • Contact the Authorities: Report the scam to local law enforcement or your state’s fraud unit. The sooner, the better.
  • Hire a Mortgage Attorney: These folks specialize in real estate messes and can help you reclaim your property or at least get some justice.
  • Document Everything: Keep records of all conversations, contracts, payments—anything tied to the scammer. It’s gold for a legal case.
  • Warn Others: Share your story (without givin’ away personal deets) to keep friends and family from fallin’ into the same trap.

It ain’t gonna be easy, but you got rights, and there’s people out there who can help you fight.

Why Equity Skimming Matters to Us All

Here’s the thing—equity skimming ain’t just a problem for the folks who get scammed. It messes with neighborhoods when homes get foreclosed and abandoned. It makes lenders twitchy, which can tighten up loans for everyone. And it erodes trust in real estate deals, makin’ it harder for honest folks to buy or sell. We all got a stake in stampin’ out this kinda crime.

At the end of the day, equity skimming is a heartless form of fraud—real estate fraud, mortgage fraud, call it what ya will. It’s a crime that preys on the desperate, and it’s got no place in a decent society. So, whether you’re a homeowner, a renter, or just someone who cares about fairness, keep your eyes peeled for these schemes.

Final Thoughts: Stay Sharp, Stay Safe

Whew, we’ve covered a lotta ground here, huh? From definin’ equity skimming as a straight-up fraud crime to spillin’ the beans on how scammers work and how to protect yourself, I hope you’re feelin’ a bit wiser now. Remember, if someone’s offer sounds too good to be true, it probably is. Trust your instincts, get advice from pros, and don’t let no slick-talker take what’s yours.

We’re always here to break down the tough stuff and keep you in the know. Got questions about this or think you’ve spotted a scam? Drop us a line or leave a comment. Let’s keep the conversation goin’ and make sure these equity skimmers don’t stand a chance. Stay sharp out there, y’all!

what type of crime is equity skimming considered

How equity skimming works

Real estate fraud called “equity skimming” happens when a dishonest investor or person buys someone else’s house, then refinances it to steal the equity. It typically occurs when a homeowner is in financial distress, is unable to make mortgage payments, and is facing foreclosure.

Someone pretending to be an investor or “fake buyer” contacts you to help you get out of financial trouble or avoid foreclosure. They offer to take over your mortgage payments or even promise to pay you a lot of money when the property is sold. The homeowner, however, must agree to sign over the title to the home and either agree to move out of the house immediately or stay on as a tenant in the home and make monthly rent payments. While this unscrupulous “savior” continues to collect your monthly rent payments, they never make any promised payments on your mortgage to the lender, resulting in the lender foreclosing on the home. The end result is that the homeowner loses their home and any rental payments made to the equity thief, as well as seriously damaging their credit rating.

How to spot equity skimming

  • In exchange for you giving them your house, they won’t give you any money right away. Instead, they say they’ll pay you “down the road.” ”.
  • You might have to sign a power of attorney or the home’s deed.
  • They will tell you to pay them, and then they will pay your mortgage company.
  • They will tell you that you don’t need to have your home appraised.
  • They are not going to even bother to check out the house deeply.

Illegal Equity Skimming – Are you GUILTY?

FAQ

What type of crime is equity skimming considered in Florida?

Equity skimming is classified as a third-degree felony under the 2023 Florida Statutes, specifically Title XL, Chapter 697.08.

Is equity stripping illegal?

Legal Remedies The statutes also ban certain deceptive and unfair practices associated with equity stripping. Other laws regulating the activity of “foreclosure consultants” have been passed in California, Georgia, and Missouri. Additionally, state fraud and unfair and deceptive trade practices laws may be applicable.

What is skimming in law?

Skimming is a type of white-collar crime that involves a person taking value off of the top of a certain transaction. To skim is to take “a little off of the top. “This can lead to misdemeanor or felony charges depending on the amount of money involved. It can happen with big transactions or a lot of small transactions.”

What is an example of equity skimming?

Equity skimming involves acquiring property, often through deceptive means, and stripping it of its equity without making mortgage payments. The perpetrator rents out the property and collects rental income while neglecting loan obligations.

Leave a Comment