The note buying industry is not immune from the financial scams that continue to plague our country.
Recently, one of my institutional investors reported that they had been scammed out of almost $200,000. The property and borrowers were real, both located in Los Angeles. However, the note seller was in Nevada and used a fictitious name. He used a notary that was not real and had someone impersonate the borrowers – with a fake phone number – to conduct an interview with the investor. No-one knew anything was amiss until the investor sent a package to the borrowers after the phone call and the borrowers called the investor asking what was happening.
Shortly thereafter, a broker who also uses the institutional investor at times reported that he and a private investor were scammed out of $300,000 in a note buying scam. The details were almost identical to the prior scam, with the same property and borrowers. The parties believe that the same person perpetrated both scams.
