Florida Real Estate Commission and the FBI are investigating a new kind of real estate fraud.
November 21, 2006 – FACT: A broad scale investigation is underway in the Tampa, FL area exposing a practice of sales contracts for purchase at prices well above the advertised selling price. Investigators have found a pattern of inflated appraisals and cozy relationships with certain title/closing companies. Sellers were approached with offers at or below the advertised selling price but told that the transaction would be at a higher price. The difference between the sellers proceeds and the contract price were recorded in the HUD statement as payout. This money actually goes to the perpetrators and is split between the shill buyer, the buyer agent, the appraiser, and the title company. The lender is left holding the bag for a mortgage that is not supported by the true underlying value of the property.
Rumor: A similar investigation is underway in Flagler County – actually 2 to 6 separate investigations.