Over the past year I've experienced a couple of buyer's agents and loan officers who appeared to be attempting to commit mortgage fraud with an offer on one of my listings. I've heard of a few different ways that it can be done, but have experienced and seen this one particular method the most. The buyer's agent makes an offer for a considerable amount more than what a home is currently listed for, and worth for that matter, sometimes $100,000 more. They write in the offer that the additional funds will be either refunded to the buyer for repairs and upgrades to the home (which may or may not need the repairs/upgrades), or the money will be given to the buyer's agent in the form of a commission. In addition to this, the buyer's agent then asks the seller's agent to adjust the price of the home in the MLS database to reflect the inflated offer price.
Obviously this is illegal, immoral, unethical, and whatever else you want to add to that list. And not only is the buyer, buyer's agent, and loan officer on the hook if caught, but the seller and seller's agent could also be implicated due to the fact that they knowingly inflated the price of the home to an unrealistic amount to allow the fraud to occur.
In the Phoenix market where homes are sitting on the market for extended periods of time, some sellers are getting to the point where any offer is welcome and they feel that as long as they don't ask what's going on they are free and clear and their home is sold. But that is not the case. Even though the seller is not the initiating party of the fraud, becuase they reasonably should have known what was happening and didn't stop it or alert the proper authorities they could be in hot water as well.