California Real Estate Fraud Report

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06
Dec

Short Sale Fraud and Flopping by Real Estate Agents

A recent posting on Dr. Housing Bubble underscore on of the premises of my e-book “How to Commit Short Sale Fraud . . . and Get Away with It” – that short sale fraud is occurring in many urban markets.

The Dr. Housing Bubble post talks about flopping, which occurs when the listing agent for a short sale property conspires with the buyer (and sometimes the seller) to accept a lowball offer on the property. The listing agent submits the low offer to the lender, intentionally not informing the lender that there are one or more higher offers. If the sale goes through, the listing agent, who usually has a financial interest in the lowball purchase, contacts one of the higher offers and resells the property to that buyer, pocketing another commission.

Short sale fraud, a subset of real estate fraud, can only happen through “asymmetrical information” – the listing agent controls exact what information is passed on to the lender. The lending institution, at least with current standards of practice, is forced to trust that the seller and his listing agent have submitted the highest and best offer. Since many home buyers speak openly about short sales being rigged and a number of honest real estate agents and brokers have written the same, this is ample evidence that housing prices are being artificially distorted, which not only harms neighboring properties where the owner wants to sell or refinance, but also the property tax base.

Flopping is just one of many forms of short sale fraud. My e-book discusses in depth a number of these schemes and why it is so easy to commit them. My e-book also explains how short sale fraud can be stopped dead in its tracks by taking simple, common-sense steps to eliminate the loopholes in the current system.

You can get the scoop of how crooked consumers, their real estate agents and some of their bank-insider friends profit from short sale fraud by reading “How to Commit Short Sale Fraud . . . and Get Away with It.”

© 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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