WASHINGTON (Source: MarketWatch By Lew Sichelman) — Rarely has a topic elicited as much response as my column about the scam known as flopping, which is the “art” of intentionally misrepresenting the value of a financially strapped borrower’s house in order to buy it at a discounted price from the lender and resell it at its true market value. Under a flopping scam, the owner seeks permission from the lender for a short sale at a price that is below what he owes on the property. The lender hires a real- estate agent to provide what’s known in the trade as a “broker price opinion,” which is the agent’s informed estimate of the property’s worth. But instead of providing honest evaluations, some agents are low-balling the number. And then, if the lender accepts the figure, they or an accomplice buy the house in question at that price and flip it, or resell it quickly at the true market value and pocket the difference.
Source: MarketWatch By Lew Sichelman
July 1, 2011, 12:01 a.m. EDT
To read more, click on this link