Real-estate market again ripe for fraud

by Moe Bedard on December 19, 2011 in Scams

(Source: By Kenneth R. Harney, Boston Herald)

WASHINGTON — Could today’s seductive conditions in the housing market — severely marked-down prices, record low interest rates and hundreds of thousands of foreclosures waiting to be resold — be breeding new generations of the very practices that led to the crash?

In an ironic twist, there are signs that the wreckage left over from the housing bust may be reigniting dubious real-estate schemes and fraud. According to researchers:
–Property flippers are back in action in places like South Florida and Las Vegas, where condo prices crashed but are now seeing appreciation again in some areas.

–So-called “floppers” are defrauding banks by hijacking short sales at prices below what legitimate purchasers are willing to pay. In these schemes, realty agents obtain fraudulent appraisals to persuade banks to sell houses at below-market prices to investor groups. The investors then flip the houses at fair market prices to ordinary homebuyers and split the quick profits. –Creative “credit enhancement” companies are “renting” investors the bank-account balances they need to demonstrate to lenders that they have the financial wherewithal to qualify for a mortgage. The accounts are for real, but they don’t belong to the loan applicants who claim them. READ MORE