Real Estate fraud is booming like never before, and con artists are finding new and ingenious ways to fleece unsuspecting property investors. To highlight this negative trend, and give potential property investors a vital heads up, TheMoveChannel.com is publishing a series of special features highlighting the world's most prevalent real estate scams.

They start off with what the Federal Bureau of Investigation (FBI) describes as a growing crisis: Foreclosure scams.

Foreclosure Scams

According to the FBI, this particular scam began in California and has spread across the United States like wildfire over the last few years, with the states including Texas, Nevada, Maryland and Kansas being duped by con artists using bogus bankruptcies to trick homeowners and lenders.

How does it work? The scams take advantage of the fact that a bankruptcy automatically delays home foreclosures, which are at record levels. Scammers approach people facing foreclosure, offer to save their property for an upfront or monthly fee and then persuade the homeowner to assign them a legal interest in the property.

Then the scammers,often without the homeowners knowledge,transfer fractional shares in the property, often 5 percent or less, to third parties. These third parties are usually fictional, although in some cases the scam artists have recruited homeless people to play the part!

They then file bankruptcy petitions in the names of these third parties. Sometimes, as in cases recently discover in Kansas, it is in courts thousands of miles from where the property is located.

Sometimes the scammers reap monthly fees ranging from $250 to $850 or more from homeowners who think,because debt collectors are not calling anymore, that the foreclosure is stopped. Some homeowners may be led to think the fees are paying off their loans.

In other cases, the scammers take over the property and rent it for months to unsuspecting tenants, who are evicted after the ruse is discovered.

Tens of thousands of people victimised.

Recent statistics compiled by the FBI suggest that escalating foreclosures are providing criminals with an unsurpassed opportunity to exploit and defraud vulnerable homeowners.

A spokesperson for the FBI said: The perpetrators convince homeowners that they can save their homes from foreclosure through deed transfers and the payment of up front fees. This foreclosure rescue often involves a manipulated deed process that results in the preparation of forged deeds. In extreme instances, perpetrators may sell the home or secure a second loan without the homeowners knowledge, stripping the propertys equity for personal enrichment.

Although there are no nationwide statistics on foreclosure scams, a recent survey of consumer groups and lawyers released by the National Consumer Law Center indicates that "many, many thousands" of people have been victimised.

Steve Tripoli, who wrote the report with the organization's attorney, Elizabeth Renuart, explained: The run-up in house prices has created a group of cash-strapped but house-rich owners who are particularly vulnerable when hit by emergencies, such as the loss of a job or medical problems.

Some of those struggling with housing payments - especially minorities and the elderly - have sub-prime, high-cost mortgage loans, which compounds the problem. Put those all together, and you've got a ripe opening for this type of scam.

US States fighting back.

Florida is one of twelve states actively fighting back with tough new anti- fraud laws. Florida Senator Mike Fasano and Republican Clay Ford have joined the fight against foreclosure scams with their Foreclosure Fraud Prevention Act that cleared a House committee at the beginning of March 2008. The bill is a pet project for Attorney General Bill McCollum, who in January announced that his office would go after shady companies preying on vulnerable homeowners.

That is when Ford and Fasano announced that they would push legislation in the House and Senate to make certain foreclosure rescue practices illegal. Said Ford: We are looking for the scam artists. For many Floridians, homeownership is the epitome of the American dream. But some dreams turn into a nightmare.

Florida Attorney General Bill McCollum, added: We know that they were bad apples and we are in the process of weeding them out. For example, we have recently filed suit against a National Foreclosure Management, a company that has defrauded 80 homeowners of nearly $2 million. There are at least 20 other businesses being investigated right now, and I suspect we will unearth more as we go through this.

Dan Johnson, Managing Director of TheMoveChannel.com, bemoaned the negative impact foreclosure scams can have on the individual: This is perhaps the most heartless of all the scams that will feature in this series. The strain and stress that a foreclosure can place upon an individual and their relationships is bad enough, without the realisation that you have been duped out of more money into the bargain.

These fraudsters prey on victims that are in such a financial hole that they are desperate to try anything to escape the mire that they have descended into, which is really pretty dastardly. Unfortunately, because of the pace that the courts work at, scamsters are usually long gone before anyone realises what has happened.

Tips for avoiding the scam.

The US Department of Justice has offered the following advice for people who may be risk from this scam:

Be suspicious of any person or company that calls itself a mortgage consultant or a foreclosure service.

Be wary of marketing procedures.

Do not trust anyone who uses flyers or solicits for business door-to- door.

Be suspicious of offers to lease back your home, so you can buy it back over time.

Do not fall for promises that seem too good to be true.

Be wary of offers that promise to save your credit or find a buyer within seven days.