I just saw a new listing come up for sale in my area that was part of a mortgage fraud scheme during the housing crisis. This brought up a lot of memories of what I saw going on around here. I decided to put together a video showing specific examples of how the fraud was committed and how much money some investors made without anything happening to them. The agent on some of these deals even committed suicide which brings up even more questions about what really happened.
Fraud like this also made it much harder for honest real estate investors to do business as lending and appraisals were forever changed.
You can learn more about real estate investing in my blog
With these deals, a real estate investor would buy a house for retail value. Complete a lipstick remodel. Then sell the property to themselves or a company they controlled for close to or more than twice as much as the house was worth. They would then get a 100 percent loan when they sold it. They would have a fake lease to justify the inflated price as these were all rental properties. Once they got the new loan they would keep the money, not make a payment, and let the house go into foreclosure. In one case I show on this video the same investor bought the house back after it was foreclosed on.
The same people did this at least 50 times from what I can see netting $100,000 to $200,000 on each deal after the new loans were taken out. I have personally been in two of the houses I show and saw the fake leases and rehab work.
Here is a link to other fraud in our area I discuss where the people were caught and went to jail.
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