Source:
Pinellas businessman causes trouble again by renting home in foreclosure to family.
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(1) Depending on how a semi-creative (and motivated) criminal prosecutor interprets and applies state law, engaging in rent skimming (referred to in the Florida Statutes as "equity skimming") two or more times within a 3-year period might constitute a third-degree felony in Florida. See
Section 697.08, Florida Statutes:
- 697.08 Equity skimming.—
(1) It is unlawful for any person, with intent to defraud the owner of real property, to engage in equity skimming, which is, to:
- (a) Purchase, within a 3-year period, two or more single-family dwellings, two-family dwellings, three-family dwellings, or four-family dwellings, or a combination thereof, that are subject to a loan that is in default at the time of purchase or within 1 year after the time of purchase, which loan is secured by a mortgage or deed of trust;
- (b) Fail to make payments under the mortgage or deed of trust as the payments become due, regardless of whether the purchaser is obligated on the loan; and
- (c) Apply, or authorize the application of, rents from such dwellings for the person’s own use.
- (2) A violation of subsection (1) constitutes a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
Rent skimming/equity skimming may also be illegal in other jurisdictions. See
People v. Phelps, 837 P.2d 755 (Colo. 1992), quoting with approval from
United States v. Capano, 786 F.2d 122 (3d Cir.1986):
- "Equity skimming is the practice of diverting revenues generated by mortgaged property in default to purposes other than property maintenance or mortgage payments."
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