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Short Sale Option Contracts are Fraud, if you didn't know it by now!

41 Charged in 5 Mortgage Fraud Cases

by alissandria obrien of Preservation Monthly 06/24/2009

....15 individual defendants and four businesses purchased distressed properties, including from the U.S. Department of Housing and Urban Development, and then resold them for fraudulently inflated prices approximately two to three times the purchase price.....

Link to see the full article. http://www.preservationmonthly.com/story_2012.htm

I have blogged on this over and over, each time, I get all kinds of hate mail and personal attacks but, as i have been saying since last year, when this started taking off in my area, it's fraud.

by the way, I am not going to argue with anyone if it is or isn't.....I have contacted my local FBI office and was told that if anyone has a question about this process, they can call them directly and they will help you understand just why it's illegal.

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Comment by CJ Oliver on July 1, 2009 at 4:12pm
Flipping is flipping is flipping. Doesn't matter what you call it. Regular short sales with a hardship letter and verifiable distress should not bring any liability when it is sold for more after a good clean up, painting and landscaping. It certainly is understandable though when someone buys a house 2-3 times and claims to fix it up and sells is for double and triple the purchase price. We are all smart enough to know fraud when we see it.
Comment by Robert Young on June 29, 2009 at 8:49am
That article didn't really detail the offense, but I'm sure it must have been serious. I'm sure it was more involved, then buying low and selling high. If that's a crime, lots of people are going to jail.
Comment by Noel Cash on June 27, 2009 at 11:03pm
p.s. "involved" as in involved with "creative options/ transfers to trusts/ etc
Comment by Noel Cash on June 27, 2009 at 11:01pm
this is just the start of the fall out. Unfortunately, much of this "new" housing market has many realtors involved in real estate activities ( bpo's , loan modifications, etc. ) that many of us have yet to see the liability for that $50 ck. Being involved with "creative" sales and as we've mentioned in other posts, stepping into a transaction without full disclosure to us can create a minefield and a backlash of liability. I've been doing this for 24 years and I try to be so cautious. I might be behind the curve on what shakes out as "ok" creative but right now I feel that there is so much slippery stuff going on with these options and trusts in short sales, it's not at all worth it to me to get involved in anyway.
Comment by Jesus (Jesse) Gonzalez on June 26, 2009 at 12:02pm
Steele, you are absolutely correct.
Comment by Steele V. Propp on June 26, 2009 at 11:51am
Not arguing but any technique in investing can be turned into a fraudulent one. I would respectfully say that options can be done legally. What the FBI and others are running into, of course, is a type that is illegal. But rarely is anything a "blanket illegal".

Not unlike dual agency. Hard to do correctly but can be done.

And notice no name calling was involved :>)
Comment by Steve Adkins on June 25, 2009 at 6:23pm
Gee, no one arguing about this. I guess people going to jail has scared a few folks?

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