When House Flipping Turns Illegal
Flipping a house is a practice that has been done by many. While it can be done effectively, providing those who take the time to do it fast and beneficial rewards, it can also be done illegally in some cases, crossing legal guidelines that are imposed by the government. House flipping began growing in popularity with the increase in the real estate market. It became a popular occurrence to buy a home, spruce it up a bit and sell it on the market for more than you paid, earning a quick payback on the investment. Some people simply looked to do the practice to make quick money, while others became much more serious about the practice, with a growing amount of investors paying cash on foreclosure homes at auctions. While flipping a house in itself can be done legally, the term has been used liberally to also refer to the illegal practices that can also occur.
Some investors have taken up more illegal practices such as buying and selling homes to each other at significantly inflated prices which would allow them to borrow more money than they otherwise would have been able to. Others have given funds to those that would normally be unable to qualify for a home and in some instances documents have been illegally falsified in attempts to get the results they were searching for. The government fraudulent activities as well as the negative effects on the real estate market, took action through prohibiting a FHA-insured mortgage for a house being sold less than 90 days after it had been purchased. Though the ban has since been waived, there are still a number of restrictions for those that find themselves in this type of situation.
Former real estate agent, CA, is testifying as a witness in a case of massive fraud in a real estate flipping scheme. The witness is expected to provide great insight into the event, being one of the head initiators of the scam himself. He not only pleaded guilty to the charges already, but has agreed to help police with the case, earning a significantly greater sentencing than he otherwise would have. While this move may hurt the defensive team in some ways, it can also work to their advantage since Adams has been viewed as the creator of the conspiracy while the others were victims who did not understand the process that was going on. The repercussions of the conspiracy can have great penalties, with the defendants facing years in prison. One of the defendants in the case recently pleaded guilty to the charges and may be sentenced up to 30 years in jail as a result.
For many investors or buyers, this plan seemed like a great idea at the time; however some are now finding themselves in unexpected trouble with the law. When dealing with a real estate issue pertaining to the law it is crucial to have the experience of a professional experienced in real estate litigation who understands what the situation entails.