The FLIP SCAM is one form of Foreclosure Scam. Ordinarily, a ‘flipper’ purchases a house legitimately. With necessary aid of an officiating house appraiser in on the plan, the flipper will then have the house appraised at a price ridiculously higher than the purchase price. Then a ‘straw buyer’ – a third felon in the mix –will get a loan for the higher cost with use of false financial documents. Within hours, the two sales are closed almost simultaneously.
The “flipper” sells the house to the aforementioned straw buyer at an inflated price, then buys the house from the original seller for much less of a price. Together, they – the flipper, the straw man, and the appraiser – pocket the difference between the two prices. The flipper then defaults on the mortgage loan, leaving the house to be repossessed by the lender, who is now at a huge loss. Clearly, the flip-scam illustrates a highly intricate, extremely sophisticated, radically deceptive and frightening level of real estate fraud.
Illegal flipping schemes of this nature have built notoriety in the United States especially over the past two decades, and they have become exceedingly abundant as of recently. Within recent times, Real Estate crimes have run amuck. A Realtor out for a quick fix, harmonious with many greedy and misleading Wall Street brokers of the 1980’s, proclaims the modern breed of carnivore that Federal Agents are out to exterminate.
As we can see, even a new vocabulary has been formed to distinguish between a common variety of these crimes—words such as Flipping and Straw Buyer. Now more than ever greed has become predominate in distinguishing American merchants from any other breed of human. But how much more personal greed can American communities embrace before we all see this Nation fold?
First, homeowners fall behind on Illegal flipping schemes. Then reality sets in and DESPERATION, FEAR, ANGUISH, and many other emotional concerns soon follow, warranted concerns or not. At the same time, too, they become vulnerable in hopes of some form of Savior to come alleviate their problems.
Through the process of these vulnerable measures, MOST vulnerable homeowners irrationally think to make poor, uninformed decisions and fall victim to foreclosure “rescue” scams — which becomes completely a matter of PUBLIC RECORD and, at that point, they develop a new breed of vulnerability: many CRIMINALS who have already tested and tried different means to manipulate them for their gain.
United States Attorneys’ offices of Northern California file federal charges regularly of thieves performing these Flip-Scams. They are then typically taken into custody for bank fraud, for allegedly submitting fraudulent appraisals. But do to such intricacy, these are difficult to detect — in many cases, even difficult to determine any concrete accountability after the fact.
B David Ferrel
