4.0 hours Good Guys/Bad Guys - Who's Who in Mortgage Fraud – Course Syllabus

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Course Syllabus:

4.0 Elective Hours

Did you know?

The U.S. Department of Housing and Urban Development (HUD) was the first agency to establish a rule stating that if a person receives an FHA home loan, they must own that house 90 days before reselling it. The Veterans Administration (VA) now has the same rule.

HUD also states that you cannot buy property and then resell it without closing. Before this loophole was closed, agents were buying lease-purchase properties and then assigning their contracts to the new buyer of the home after flipping. HUD stated that to sell the property, the owner must have the title to it first.

Conventional lenders have enacted similar rules stating that, if the property has been owned less than a certain number of months, they will not make a new loan. Appraisers must show all sales of a property within the last year to alert the lender to the possibility that it is being flipped. Fraudulent appraisers, of course, would omit that data from their reports. Some lenders are requiring two different appraisals for property that is being re-sold within the year.

For fixer-uppers that have been rehabbed, some lenders request receipts and documentation proving the value of the work that must be done. If you purchase a home, fix it up, and then resell, you must show to the lender all associated receipts and documentation attesting to the added value before selling.

Many rules are enacted to cut down or help prevent illegal flipping operations and more are coming with tighter controls. This course is designed to give the real estate professional a better understanding of the most common mortgage fraud schemes.

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