Real Estate Is Growing; So Is Realty Fraud Article

	1888 Articles Home \| Finance Articles \| Real Estate Articles	Real Estate RSS
Real Estate Is Growing; So Is Realty Fraud

With the growth of real estate market in India, the number of real estate fraud is also increasing. Indian sub-prime lending market is exploiting needy homeowners by provoking them to borrow more than the equity in their home.

Author: Addi Vardhaman

Article Tools:

Every boom has a flip side. The merger mania of the Eighties produced insider trading scandals. The '90s stock bubble was busted for biased investment research and added 'built-in volatility' as a synonym. And, it is now the turn of real estate, the hottest market in the past eight years. The urge to cash in on rising home values has spawned a growing share of hucksters, schemers, rip-off artists and malpractices.

So far, it is tough to know exactly how widespread the problem is in the Indian realty sector; just as conflicts with stock analysts and bankers didn't come to light until after the Internet bubble popped in 2001 and investors started to get affected. According to figures conducted by a national economic daily, 235 real estate fraud cases against individuals in 2005, more than double the number it brought in 2001 and this number has increased almost five times between 2001 and 2007. The market was so lucrative that everyone was looking to jump in and make a fast buck,and that leads to a lot of property flipping and false appraisals.

Moderate-income home owners who are tempted to extract cash from the equity in their homes have been hard hit by unscrupulous people of this sector. In one of the most common rip-offs, customers would sign away the deeds to their homes as "collateral" or take on loans they couldn't afford, leading to foreclosure or repossession. Another method unscrupulous lenders use is to convince needy borrowers to fudge annual income claims on applications to qualify for a bigger loan than their repayment capacity. An applicant who can't make the payments on time can lose his property and end up in dire situations like bankruptcy.

Stripping people of their home equity has become rampant in the Indian sub-prime lending market. Credit-challenged or adverse credit rated home owners who often don't know exactly how much home equity they're sitting on are the easy target.

About Author

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Paisawaisa as a finance specialist.

For more information related to finance community please visit: http://www.paisawaisa.com

Article Source: http://www.1888articles.com/author-addi-vardhaman-9795.html