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Underwriter warns of new short sale scam

July 16, 2012 03:00PM

Florida’s largest title insurance underwriter, Attorney’s Title Fund Services, has issued an alert to homeowners and title insurance companies warning of fake Bank of America short sale approval letters, the Sun Sentinel reported.  Last month three men in California were arrested for allegedly fabricating letters imitating BofA’s logo that gave short sale approval — the lender’s permission to sell a home for less than the remaining value of the mortgage.

“In some cases, the defendants used short sale approval letters that had been entirely fabricated to carry out their schemes,” said the U.S. Attorney’s Office in Los Angeles. “As a result, homebuyers and investors purchased homes they thought had a clear title but were actually devalued and subject to hundreds of thousands of dollars worth of liens.” [Sun Sentinel]