Foreclosure Auctions: Are Bogus Prices Hiding Profit?
Properties purchased through Orange County Clerk of Courts foreclosure sales at one price are appearing in the county Property Appraiser’s Office records at a higher price.
Palm Coast, FL – April 15, 2011
Properties purchased through Orange County Clerk of Courts foreclosure sales at one price are appearing in the county Property Appraiser’s Office records at a higher price, often tens of thousands of dollars more, according to an Orlando Sentinel review of 16 recent purchases.
The discrepancy illustrates inherent flaws in a system that apparently allows investors buying up distressed properties toinflate the sale price of their real estate by paying a slightly higher state tax on the sale, commonly known as "documentary stamp tax." The disparity in prices has gone unnoticed by the three county government bodies with a role in the sale and recording process — until now.
Hiding profit
Well, the first example, the reason why they more than likely did it is because if their ‘profit’ is 20% or more, in order to get it passed underwriting for the buyer’s financing on the end sale the original sale (from the steps or where ever) has to be seasoned for 90 days. They brought it down to look like 19% so there would be no seasoning period required regardless of what type of financing the end buyer went for.
Tricky little devils!