John L Moore Consulting

As a semi-regular newsletter feature, John Moore will present information about fraud and its prevention. You may also reach him at ext. 5486 or at jmoore@JLMCdirect.com. This month's topic is Property Flipping.

Artificially inflating market value in a specific area by the continuous selling and reselling of property(s) at increasing prices based on fraudulent appraisals. The goal is to obtain larger loans and to "skim" the equity from property.

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• Involves at least two conspirators
• Property(s) sold back and forth between conspirators in brief time frame
• Sales price increases with each transfer
• Mortgage payments made until desired inflated value is obtained
• Two or more closings occur almost simultaneously
• The conspirators default leaving lender with significant loss
• Often involves "straw buyers" to conceal identity
• Can involve an unknowing buyer who is left with huge payments, inflated value and unmanageable repair bills

• Property seller not on title
• Ownership changes two or more times in a brief period of time
• Significant value increase over comps with large upward adjustments
• Seller's name does not match name on sales contract
• Back-to-back closings
• Comp's selection doesn't bracket value
• Comps used are confirmed closed sales
• Transaction is less than an "arm's length" transaction