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Broker Facing Federal Prison Time in Short Sale Flipping Fraud

Short Sale Property Flipping Bank FraudIn real estate, short sales are triggered when a seller’s property is worth less than what they owe on the property. The seller then needs to get an agreement from their lender or lenders that will allow the seller to sell the property for less than the outstanding loan or loans against the property. This process has enticed property flippers to take advantage of property sellers and their lenders. The US attorney’s office in central California is reporting that a broker in that area has pled guilty to one count of bank fraud were the broker purchase the property at an artificially low price and turned around and immediately resold property at market value.

Short Sales have been a big part of the Simi Valley housing market for the last 7 years. Since 2008, I’ve helped many home sellers work with their lender to sell their properties under a short sale agreement. Additionally I helped many buyers purchase properties that were short sales. What I learned from the seller side is that I would get several requests from direct investors/brokers to sell them the property significantly below market value and if I worked with them they would pay me a full commission. Needless to say, I never worked with any of those proposals as my duty was to my seller. That duty was to minimize the loss on the property with their lender in the short sale process. I always market the property looking for the highest and best offer. On the buyer side I have much less control as we are subject to the listing agent’s experience in the short sale process. Nine out of 10 times I dealt with listing agents that had no business taking on a short sale listing. Seeing the deficiencies in those colleagues really hammers home how important it is who you hire to help handle your short sale. The last thing you need after going through the short sale process, is to be in a lawsuit defending yourself from allegations of defrauding your lender.

Property owners that need the benefits of the short sale process do not need to be involved in property flipping schemes which can wind up as bank fraud. If a property’s value is underwater compared to the amount owed to the bank, a short sale  many times can be worked out to the satisfaction of the property owner and their lender. It’s not the job of the listing agent or the seller to help others make money off an investment or property flip.

I have worked with many home sellers to avoid these real estate land mines  since 2008. If you are contemplating short selling your house please call me for FREE consultation with no obligations. (805) 432-7705 cell/text

Related Articles:

  • What is an approved Short Sale
  • The Short Sale Process
  • Beware of Short Sale Flippers
  • Considering A Short Sale?

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Posted in: Real Estate News, Sellers, short sales Tagged: bank fraud, California, prison, Property Flipping, property seller, Short Sale, Simi Valley

About Ted Mackel

Active real estate broker and entrepreneur in Simi Valley. Ted has a passion for business, has deep knowledge about residential and commercial real estate and is one of the few to be a long time blogger/writer on these subjects. In his free time you'll find Ted enjoying baseball with his family (Go Dodgers), reaching his goal of spanish fluency, and pursuing his hobbies with RC aircraft and Lionel Trains.

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Client Testimonials

Ted actually helped us find a new home AND sell two homes. He was beyond helpful with everything. When looking for a home, Ted didn't waste our time…My husband and I are really busy so this meant a lot to us….he always had plenty of houses lined up for us to look at and he acted as our personal chauffeur. He really knows Simi, so he knew exactly where to take us….and ultimately he found us our beautiful new home. Selling the other two was a breeze…Ted took care of everything. No complaints here!

suelac2

Ted was wonderful in helping us sell our house. He was in constant communication with us and made the process very easy and stress-free. He was very knowledgeable and professional. I highly recommend him.

reuel

Professional and very easy to work with.

geralyn

Ted's continuing knowledge of local real estate markets enabled an immediate, correct valuation of the house we sold. Calm and competent throughout the process, he remained unflappable through the invevitable hurdles. His escrow team at Keller Williams were perfect.

jeff

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