Here in the UK, this is the crime that dare not speak its name....
However, here is a nice piece of investigative journalism from the US Herald Tribune.
Here is a nice PDF file explaining the scam....
Fraudulent property flipping ran rampant during this decade's housing boom, with $10 billion in suspicious deals in Florida alone, a Herald-Tribune investigation has found.
The deals -- many of them inflated sales among friends, family and business associates -- drove up property values and tax bills during the boom, fed bank bailouts and failures after the boom, and fueled the foreclosure wave that has gutted property values.
Unscrupulous property flippers would buy houses or condos, then drive up the price in a few days or weeks by selling it to someone they knew. Buyers used the inflated price to get bank loans for more than the property was worth, leaving money for flippers to split as profit.
Despite their role in one of Florida's largest white-collar crime sprees, the vast majority of unscrupulous real estate flippers will never be prosecuted. Most Florida law enforcement agencies have done little to investigate property flip fraud. The FBI has been left to chase far more cases than it can handle.
3 comments:
isn't BTL a euphemision for mortgage fraud?
Not only is there fraud, but there appear to be large organisations with vested interest in getting the house prices increasing. In my local area I have seen house prices increase from an average of 170k to 230k in 4 months (between Jan and April 2009). I see large estate agents like Dixons reporting a large number of house sales, when other agencies appear to be selling nothing. This all stinks of market manipulation and is surely defrauding some genuine house buyers out of getting a house at a decent price.
Get with the programme, these people are merely the victims of the bankers who have been convicted in the court of public opinion.
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