Trust Deed Investment Fraud – What You Need To Know

The financial landscape offers a plethora of investment opportunities, one of which is trust deed investments. However, these opportunities come with potential hazards, the most destructive being trust deed investment fraud. Some people look to exploit others and use illegal maneuvers to make fast cash.

Deldar Legal hopes to provide a comprehensive understanding of trust deed investment fraud, how it operates, and ways to safeguard oneself from such fraudulent practices. Before we jump into the nitty-gritty, let’s get a clear understanding of what trust deed investments are and how they function. 

What Is Trust Deed Investment Fraud?

Trust deed investments involve investing in real estate loans secured by a deed of trust. The deed of trust is collateral for the loan, typically made to a property developer or owner. As an investor, you earn interest on the loan, and if the borrower defaults, you have a legal claim on the property. Sounds like a win-win, right? Well, not always. Enter trust deed investment fraud. 

READ MORE: Real Estate Scams – How To Report Identity Theft In California

Real investors typically talk a certain way and can answer standard questions about the industry. Intuition plays a major role in identifying fraudsters. If a potential business partner fails to answer basic questions, you should be suspicious and continue asking follow-ups. These tactics often revolve around the following:

  • Guaranteed High Returns
  • Lack of Transparency
  • High-Pressure Sale Tactics

The old saying, “If it’s too good to be true, it probably is,” applies to most trust deed investment fraud cases. There is nothing wrong with being optimistic about a real estate opportunity and getting excited about it, but make sure you do your homework. Research everyone involved in the deal and avoid making irreversible decisions too quickly.

Types Of Trust Deed Investment Fraud

Fraudsters often exploit the attractive benefits of trust deed investments to create a false sense of security for potential investors. They may promise high, fast, and guaranteed returns often unrealistic or unsustainable, setting the groundwork for trust deed investment fraud.

Additionally, they may fail to disclose or downplay the inherent risks of these investments, misrepresenting the investment’s true nature. Fraudsters can strike in various ways, but here are some common scams to watch out for:

  • Ponzi Scheme: Scammers promise high returns to new investors while using their money to pay off earlier investors, creating the illusion of a successful investment. 
  • Lone Flipping: Fraudsters repeatedly refinance the same property, charging excessive fees with each transaction. 
  • Phantom Projects: Con artists solicit investments for fake development projects or properties that don’t exist. 

Trust deed investment fraud happens when the benefits of these investments are falsely overstated. Speed and timing are the two crucial elements fraudsters rely on. Before you can thoroughly think things through, they aim to get you signed up and committed immediately.

Legal Options

If you fall victim to trust deed investment fraud, your first course of action should be to report the incident to the relevant authorities. Whether a local con artist has scammed you or fallen into an intricately designed trap by sophisticated fraudsters, your reports could play an integral role in bringing the criminals to justice and preventing others from suffering a similar fate.

Legal recourse is then your next step. You must hire experienced legal professionals specializing in trust deed investment fraud. The right attorney can provide guidance on how to gather and present evidence, file a lawsuit, and represent your interests in a court of law. They also have deep knowledge of trust deed investment fraud and can leverage this expertise to challenge the fraudsters effectively.

Closing Advice

Trust deed investments can be a lucrative addition to your financial portfolio but beware of the dark underbelly of fraudsters lurking in the shadows. If you’re looking to dip your toes into the world of trust deed investments, it’s crucial to be well-informed and stay vigilant. While each situation is unique, there are potential avenues to regain some or all of your lost investment.

Deldar Legal’s team of talented real estate fraud attorneys will review your case for free when you call (844) 335-3271 or contact us online. Depending on the circumstances, you could participate in a court-ordered restitution program, file a claim with your insurance company, or sometimes write off the losses on your tax return. All options are on the table when you choose our firm!

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Posted in: Real Estate Fraud

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