Short Sale "Flopping" Among Current Real Estate Scam Techniques Getting Attention From Feds

In Phoenix, Arizona, BusinessWeek reports:

• [Financial Fraud Enforcement Task Force] members were in Phoenix to hear about emerging trends in mortgage fraud from professionals who work in the real estate and mortgage industry, and community organizers and lawyers who help homeowners struggling to keep their homes. Members include senior Justice Department prosecutors, FBI officials and officials with the Department of Housing and Urban Development.

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• Real estate professionals who briefed task force members outlined new and emerging fraud trends, including the "flopping" of short-sale properties. That's a technique where someone gets two price opinions from brokers, giving the low one to the bank arranging a short sale of a home nearing foreclosure and the high one to a potential buyer, said Holly Eslinger, president of the Arizona Association of Realtors.

• Such techniques can net an unscrupulous buyer tens of thousands of dollars while shorting the bank and homeowner and taking advantage of the subsequent buyer, she said.

Source: US AG brings more money to fight AZ mortgage fraud.