Feds Investigate Possible Flipping Scam In One Northern Virginia Subdivision

In Northern Virginia, The Washington Post reports on a Federal home flipping investigation taking shape in one Northern Virginia subdivision. The subdivision is part of a sprawling 186-acre community being developed by D.R. Horton of Fort Worth, one of the nation's largest home builders. According to the story:

• Sources with knowledge of the probe at the Villages at Rippon Landing said investigators are examining why a number of townhouses in a five-block area were bought and resold quickly, for a large profit, even as the real estate market was cooling and unsold homes dotted the neighborhood. The new buyers sometimes failed to pay the mortgages, sending homes into foreclosure and hurting lenders. Renters found themselves unexpectedly forced to move. The FBI this month launched a mortgage fraud task force, gathering federal prosecutors and law enforcement officials from Prince William, Loudoun and Fairfax counties to map out a strategy to tackle the issue region-wide.

Reportedly, some of those townhouses were never occupied and went into foreclosure. Other townhouses were used in rent skimming scams. In those cases, properties were rented to tenants and rent collected from them while at the same time, mortgage payments went unpaid, thereby allowing the properties to go into foreclosure.

For more, see FBI Probes Virginia Mortgage Scam (Townhouses Bought and Sold for Big Profits as Market Was Cooling).