Short Sale Fraud Increases

For the past few years short sales have been a popular way for delinquent homeowners to escape foreclosure and save whatever is left of their financial fortune.  Short sales, which is when the lender sales the property for less then what it was purchased for,  is abundant in states like Florida and California who were among the hardest hit states during the Real Estate crash.  With the increase frequency in short sales, there has also been a boost in fraud risk. Short sales have been the target of many investment groups that are looking to take advantage of deeply discounted properties.  There has been reports indicating that investors are re-selling the property the same day they acquire it.  The investors would provide the broker commissions when the house is sold and when it is flipped.   The profit can be very lucrative.  According to The Press Enterprise, short sales re-sold the same day can yield a 34% profit or $56,947 gain between buying and flipping the home.  This practice is popular in California where the state leads the nation in short sales. It’s hard to say if this is also being done in Florida. In all honesty though, it wouldn’t surprise me one bit.

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~ by fnunez on June 7, 2011.

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