The warning signs a money launderer wants to buy your home

The following is an excerpt from an article by Lew Sichelman published by MarketWatch on November 27, 2009

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Financial Crimes Enforcement Network, or FinCen, is considering a rule requiring real estate brokers, among other entities which don't have a direct financial interest in property sales, to file the same suspicious activity reports that lenders are compelled to file when they smell something fishy.
While mortgage fraud and money laundering are often viewed as separate criminal enterprises, FinCen, a bureau within the Treasury department that collects and analyzes information about financial transactions in an effort to combat crime, has found they are often interconnected.
"Despite the relative illiquidity of most real estate assets," the agency says, "money launderers have used residential mortgage transactions -- fraudulently and legitimately structured -- to disguise the proceeds of crime."
It's doubtful unsuspecting sellers will find themselves in trouble with law enforcement if they unknowingly wind up on the receiving end of a money-laundering scheme. You won't be forced to take your house back and return the money to the authorities, for example.
But if there is a connection, you can be found guilty of a crime and the authorities can take your money and your house and put you in jail. So even if you are desperate to sell your place to get out from an underwater mortgage, it is best to resist the temptation.
To protect yourself from becoming a "victim," pay attention to the following warning signs. Alone, one of these red flags may not mean much. But together, they could be an indication that you have been targeted as an easy mark:
· No broker or agent. It's not all that unusual for a ready, willing and able buyer to show up on a seller's front door unannounced -- and unaccompanied by a real estate agent or broker. But if that happens to you proceed cautiously, especially if some of the other warning signs also are prevalent. "In a lot of the fraud schemes we see, there is no Realtor involvement, no unbiased third-party," says Kathy Cooke, fraud investigation manager at mortgage giant Freddie Mac. "A big red flag is a buyer who's set up and ready to go."
· Wire transfers. If the buyer's funds are being wired from another account, especially one from out of the country, or if payments are made from a third party who is not involved in the transaction, the money could be awash in criminal behavior. The same holds for bank drafts which do not state the name of the payer, third-party checks, bearer checks or other anonymous instruments.
· No negotiations. If the buyer does not seem particularly interested in bargaining for a better price, especially in an economy where values in some places are still declining, something could be amiss. Ditto if the buyer shows little interest in when the property will actually be handed over. Be particularly aware of deals in which there is no intention to record the sale, or there is no contract clause penalizing the buyer with the loss of a deposit if the sales does not go forward.
· Hurry, hurry. Beware the buyer who shows a strong interest in completing the transaction quickly. There could be a good reason for the rush, but if the buyer can't give one, your antenna should wiggle.
· No worries. If they buyer doesn't want to look around, give your place the once-over or hire an independent inspector to examine the house, ask yourself what the true motivation might be. Many buyers pass on inspections in a seller's market. But it's a buyer's market now, and only a fool -- or a thief -- would not want one today.
· Intermediaries. Buyers who claim to be working on behalf of minors, incapacitated individuals, groups or persons who appear to lack the economic capacity to afford your property are often not who they say they are.
· Distant places. Transactions involving persons residing in known tax havens or risk territories often are funded by laundered money. So are those involving someone who refuses to reveal a current address or lists it as a post office box.
· Straws. Even if someone offers a handsome "reward," don't allow your name or credit to be used as the buyer of a property. Also, if you believe the buyer is not acting on his own behalf and is trying to hide the identity of the real customers, or if the deal starts out in one person's name and ends up in another without a logical explanation, be careful. Your instincts are usually spot on.
· Flips. If the buyer presents a scheme in which he plans to buy and sell your house several times over in rapid succession at prices significantly greater than what you are receiving, run, don't walk, to the nearest exit.

Be wise, be safe.