California Real Estate Fraud Report

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02
Jun

CoreLogic Says Short Sale Fraud Up 20%

According to CoreLogic, one in every 52 short sales in the first half of 2010 was “suspicious.”  The analytics firm states that by the end of 2011, U.S. banks could lose $375 million due to short sale fraud and that the increase is 20% from the $310 million losses it estimated for 2010.

CoreLogic has a very narrow definition of short sale fraud: it is a short sale that is followed by a second sale of the same property at a “substantially higher price,” usually within a few days or weeks. According to Tim Grace, Senior Vice-President of Product Management and Analytics at CoreLogic, “These same-day resales are on average $50,000 greater than the lender agreed upon short sale price.”

Because CoreLogic uses such a narrow definition of short sale fraud (I can identify at least 3-4 other variations that all qualify as short sale fraud), I can say with confidence that the percentage of short sales in California that are fraudulent is several times higher than the 2% his firm estimates. And the victims are less the lenders than the neighborhoods where deliberate undervaluations create sales comparables that steal equity from the fraudulent seller’s neighbors.

Read the full article in the OC Register, Housing Wire and the Press Enterprise.

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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