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The Real Deal Miami

Short sale fraud on the rise nationally

September 15, 2010 09:45AM

Short sale scams are likely to rise, according to a study released by
CoreLogic, as new federal foreclosure prevention programs used to speed
up such transactions gather steam and home values remain low. The report
estimates that fraud already occurs on 2 percent of all short sales
nationally, costing banks as much as $310 million annually. The types of
short sale fraud outlined in the report vary, but they generally depend
on an agent submitting an artificially low bid from an investor to the
bank. The bank unwittingly accepts the price, then the investor flips
the property, selling it for its higher, true resale value. [Palm
Beach Post]