Guys, NO WHERE in my post did I say there was NO FRAUD. Robert Hagberg, a fraud investigator for Freddie Mac recently has said clearly in a NAR Podcast that he couldn't put any numbers on short sale fraud. I would put the link up, but my links are being removed to the articles I'm referencing.The POINT I'm trying to make is everyone is FLIPPING out about a report that Corelogic did that when it was deciphered LEGALLY showed it was nothing more than a well developed marketing ploy. Corelogic has EVERYTHING to gain by scaring the crap out of everyone about flipping, flopping, fraud and whatever else you want to call it.The fact of the matter is there is NO LAW that says you cannot legally buy and sell the same property on the same day. THERE ARE LAWS that say if you misrepresent in any way it's fraudulent. So for those few who still want to buy and sell on the same day, I say go for it SO LONG as there is proper disclosures in all the contracts. To answer your question, NO amount of fraud should be tolerated, but you have to seriously meet tough criteria if you're going to be brought up on charges for fraud.Show me...better yet CITE me where buying and selling on the same day is illegal, and I will listen. CITE ME the actual law. You can't because there isn't one.There are elements to civil fraud that must be met1) An intentional or reckless false statement - 2) The false statement involves a material fact3) Is made with INTENT to defraud4) Is reasonably relied upon by the victim5) and results in damagesThe agents arrested MISREPRESENTED to Regions Bank. Their intent was to defraud. If a buyer of a short sale property does not misrepresent, and discloses to the lender their intentions on reselling the property IMMEDIATELY for profit, fraud is not being committed.
Michael, MORTGAGE FRAUD encompasses a WHOLE LOT of fraud. HOW MUCH short sale fraud was there?
"I never said it didn't exist. I'm saying the amount of ACTUAL SHORT SALE FRAUD is minute. You cannot use sources like the Corelogic report because they have a GAIN from it. The report is nothing more than a glorified marketing manual to get more lenders to buy their software. If you want TRUE NUMBERS, you need to go to the FBI website. People LOVE to throw around the term fraud, flip, flop, but do you realize HOW many actual cases of short sale fraud there have ever been? The ONLY case that I'm aware of is the Connecticut case. That was clearly fraudulent because the agents DIDN'T DISCLOSE to the lender their "INTENT" on reselling immediately for profit.From Attorney Ballard's findings:"It's easy to parrot this fantastic conclusion. It's another thing to analyze it. On Monday, June 6, I wrote my first article analyzing the study and found significant holes in it. When looking deeper, one finds even more.I understand that most journalists aren't investigators and don't have the time and resources to dig deeply into studies like this, particularly when the study's title is so authoritative and the data looks so extensive.Unfortunately, policy makers and regulators rely on information like this to make critical decisions.What's the result? Garbage in. Garbage out.The CoreLogic Study reportedly examines over 450,000 short sale transactions for single family residences (apparently excluding condos and coops, which in my clients' experiences have a much lower level of resales and would skew the data downward) occurring over the last three years and categorizes them into "suspicious" and "not suspicious." CoreLogic uses three parameters to categorize "suspicious" short sale resales:1. Resales within 30 days with a 10% or higher resale value; or2. Resales within 90 days with a 20% or higher resale value; or,3. Resales within 6 months with a 40% or higher resale value.Bear in mind that there is no legal basis for establishing these standards. No law sets forth an amount of "allowable profits" on real property resales. CoreLogic's standards conceivably could be argued based on national averages, but real estate values are local. RealtyTrac is another large data provider. It's study of pre-foreclosure discounts (short sales) for the first quarter of 2011 found a national average discount of 9.49 percent. HOWEVER, the discounts for California and Arizona were 20.2% and 8.4%, respectively. Tennessee came in the highest at 34.9%. These numbers are affected by the overall decline in property values in a specific market. For example, if prices in Arizona have already dropped more than 50% from their peak, then the current discounts will be smaller because prices can't go much lower."
There is nothing UNSCRUPULOUS about it if full disclosure has been written into the contracts.Anyone who believes this BS, needs to read the article written by Attorney Ron Ballard. It's VERY eye opening considering Corelogic is being sued for Appraisal Fraud...the very company that publishes marketing collateral for short sale fraud.[hotlink removed by Zillow moderator]Could a highly publicized "study" warning of $375 million of "unnecessary" loan losses in "suspicious short sales" be manipulating figures just to sell more of its author's services?Prepare to read the following in depth analysis and I'm confident you'll find that the answer is obvious.[hotlink removed by Zillow moderator]