Property Fraud Alert

Check out this scam:
Property scheme raises warning flags

A scheme doing the rounds promises to build up a passive income of R168 000 within one year. All that’s required is a monthly salary of R7 000 and a clean credit record.

Notice that bit about a clean credit record because it's going to come in handy when you commit credit fraud.

The first is a trick Optimum uses to maximise clients’ borrowing power. Van Wyk identifies four low-value properties he thinks are suitable for the purposes of the scheme. He then uses a mortgage originator to obtain quotes from each of the big four banks for each of the four properties.

He then accepts the quotes for the properties, but ensures that each is from a different bank. Each bank approves the loan, apparently unaware that three other banks are concurrently approving loans of equal value. This allows Van Wyk’s clients to borrow four times more than banks would normally allow them to. Van Wyk says he understands that there are moves afoot by the banks to close this apparent loophole – in the meantime, however, he is making hay while the sun shines.

Yeah that's totally not going to come back and bite you. And the whole scheme relies on property prices increaseing

Van Wyk says that after a year, his clients apply to the banks for bond re-financing. Of course, this is subject to the properties increasing in value over the period, and therein one finds the greatest risk to Optimum’s scheme.

And if you can't re-finance? Oops looks like you've got four mortages to pay.