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Fraud Alert: Mortgagee Questionnaire Scams, By: Nicholas J. Meinert, Esq.

In response to the tragedy at the Surfside condominium in Florida, Federal mortgagees are starting to update their questionnaires that are required to be completed in conjunction with the financing of a condominium unit sale.  These changes include questions about the current status and condition of the property that are difficult to answer, along with significant document requests from lenders. The new forms can be overwhelming, and fraudsters have already caught wind and are looking to capitalize.

Recently, our office received a telephone call from a board member attempting to fill out a new questionnaire that a “realtor” sent to the board.  After talking with the individual making the request on the telephone, the board member became suspicious and researched the telephone number. The telephone number was on a fraud list. The board member immediately called the owner selling their unit, who had never spoken with the realtor, or the realtor’s alleged client.  The mortgagee questionnaire was an attempt to defraud the association.

Our office always recommends that boards only communicate with current owners, and not become involved with potential buyers until they acquire title to avoid being accused of tortious interference.  This cautionary tale provides another great reason that boards should not become involved with potential buyers or their realtors. The board should request that all document requests and mortgagee questionnaires be provided to the board through the seller to avoid these potentially costly pitfalls.