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Reading Time:

2 minutes

Published:

29 March 2003

Billion Dollar Fraud

Home Equity Theft

If you buy a dud investment, you lose a slice of the equity in your home. Equity is the difference between what your home is worth and what you owe on your home. For example, if you have a home worth $500,000 and you owe $200,000, your equity is $300,000. If you pay $100,000 too much for a dud investment and your home is taken as security for a loan, you lose $100,000 of your equity. Just as surely as if crooks had stolen $100,000 of your money.

Those touting a dud investment will tell you that you don’t have to pay any money. Well, not from your pocket, you don’t. Not really. All you need to do is sign a lot of papers after listening to several slick presentations. It could be years before you discover how your money – your equity – was stolen. Until you decide to sell, you may never know. By that stage, the crooks have long gone. It’s like a form of real estate cancer where, until they decide to sell, victims don’t know how badly they have been hurt. This is why it can take years for complaints to surface.

In 2001, the New Zealand Commerce Commission said it received very few complaints about real estate scams. But this doesn’t mean people are not being conned, it just means people don’t know they are being conned. The ‘smart’ crimes are where the victims don’t know they are victims. Real estate investment scams almost define “the perfect crime”.

This crime – which is a form of “home equity fraud” – catches thousands of homeowners every year. The builders, the developers, the marketeers, the agents, the banks, the lawyers – they know what’s going on. It’s a billion dollar industry which takes a terrible toll on the finances of hard working and decent citizens in Australia and New Zealand.

The above is a brief extract from the investment section of the book, DON’T SIGN ANYTHING
Stories posted on this site are authentic.
The only changes may be brief edits and spelling or grammar corrections.
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