“Untold millions of dollars that banks could have recovered from the sale of distressed Florida homes have instead been pocketed as profits by a new breed of property flipper.
These flippers target houses on the verge of foreclosure and persuade banks and mortgage companies to accept lowball buyouts, sometimes by using questionable appraisals and not disclosing that a quick sale at a higher price has already been arranged, experts say.
No one knows how widespread the scheme has become. But a national glut of short sales — pre-foreclosure sales in which the lender agrees to let the house sell for less than the mortgage owed — has spawned a small industry of short-sale flippers, some of whom use these questionable tactics, experts say…”
Read the article: http://www.heraldtribune.com/article/20091115/ARTICLE/911151083/-1/NEWSSITEMAP?tc=autorefresh
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© 2009
November 19th, 2009 at 7:03 pm
Is there an official stance on short sale flipping by the AAR? Every instance I have seen it happen, everything was fully disclosed and/or the bank did not do their full due diligence. If the bank wants to trust the value of a $50 bpo of someone who is trying to list the property anyway, then that is their business. But there is nothing wrong with people flipping homes for a profit (as long as it falls within the established guidelines of course).
November 23rd, 2009 at 3:53 pm
AAR does not take official positions on these types of issues. However, you may want to check out this update from Fannie Mae on the issue:
https://www.efanniemae.com/utility/legal/pdf/fraudnews/mortgagefraudnews0709.pdf
Sage Dillon
AAR Communications Manager