South Florida Garners Third Place Nationwide in Suspicious Mortgages

by Isaac Benmergui, Esq on May 9, 2012

The Financial Crimes Enforcement Network reported that the South Florida counties of Broward, Palm Beach and Miami-Dade earned third place on the list of suspicious mortgage activity.

The agency, which is part of the Treasury Department, receives tips from financial institutions when they discover dishonest mortgages or other suspect financial practices. Last year the South Florida real estate market saw a 9 percent rise suspect report filings. Although the numbers continue to increase, South Florida held the top spot in 2010.

The trouble spots for fraudulent practice are typically short sales and appraisals, but banking are taking a stronger stance on preventing a practice called “flopping,” which involved both a short sale and an appraisal. Flopping occurs when an low appraisal is submitted to the lender, which then approves the short sale. The new owner flips the house quickly and takes a healthy profit for himself. Investors and realtors often work together on this type of scam. Now arms-length affidavits are used to state that no party involved in the purchase and sale has a shared interest in the sale.

If you’re in the market for a new home, before you sign any contract get an experience real estate attorney to look over the paperwork. In Florida especially, real estate contracts can be tricky and error-ridden. The law offices of Isaac Benmergui can help you with your legal real estate needs; call 780-800-2510 or email for more information or to set up an appointment today.


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