MI 3.0 hours Good Guys/Bad Guys - Who's Who in Mortgage Fraud (law) - Course Syllabus
3.0 Law Hours
Flipping, perhaps the best-known example of mortgage fraud, involves the purchase of a property and its quick resale for more than its true value. Some property flips are perfectly legal. A sophisticated buyer may spot undervalued real estate, then turn around and resell almost immediately. It is sometimes difficult for a real estate agent to decide whether fraud is involved in a transaction or not.
What is the difference between legal and illegal flipping? Suppose someone agrees to sell you their property for 50 cents on the dollar and you resell it for full value, 100 cents on the dollar (flipping), is that legal? Yes
If, on the other hand, you buy the house for full value, 100 cents on the dollar, then sell it for three times that amount the very same day, which would be illegal. Such a transaction would have to involve a fraudulent mortgage.
Sometimes the re-sale closes before the original purchase closes. That way the flipper doesn't have to put up any actual cash and simply walks away with the leftover proceeds from the new inflated mortgage loan. The fraud requires a crooked real estate agent and a crooked appraiser. It helps to have a crooked lender cooperating in the transaction. All three will participate and share in the profits.
This course covers the common types of mortgage fraud. Case studies and examples are presented for better understanding and clarity.