The new flipping: low ball pre-forclosure house sales followed by quick resale for a profit

[steven johnson]

Here is another charming example of predatory capitalism.

Dare I speculate there may be insiders and kickbacks going on?

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.

But fraud experts warn that some of the real estate flipping they see today involves the same kind of insider deals and manipulated sale prices that plagued the housing bubble.

The new flipping: short sales

[Sherman A1]

1. Surprising!

The the money types would find a new scheme?

Well, maybe not......

[Robb]

2. Realtors ripping off banks

I'll be honest, I have no idea who to root for here.

[Statistical]

3. +1. Exactly.

[abelenkpe]

4. +1 nt

[Warpy]

5. It sounds like a pretty risky game

because you never know which foreclosures were done via a midnight move and jingle mail and which were accompanied by completely trashing the place. The former just need paint and cleaning. The latter could conceivably need structural work after plumbing fixtures were smashed and the place flooded.

There will always be people who try to take advantage of someone else's misfortune, though.

If they're taking an unlivable place and making it livable, they're providing a service. If not, they're parasites.