They tend to show the buyers side of the story only. You know the victim side et al. Makes for a sympathy story and really gives flipping a bad name. This happened in Minneapolis where some appraisers were overappraising homes in a scam. Some unethical people were selling homes purchased for $40k or so for $80k within a day of purchase based on the scam appraisals. When the lower income buyers couldn’t make payments and the banks had to foreclose only to find out they had been scammed into lending too much on the homes. I don’t really recall all of the details but there were ads in the StarTribune telling people how flipping was this evil thing when in reality it was the over-appraisals that mislead the lenders that was the evil doings. Anyway it really gave a bad name to flipping in Minneapolis/St. Paul. I remember that shortly after this occurred the story aired on NBC Nightly News on the Fleecing of America. A lot of bad publicity. =(
There is an interesting story in Mother Jones July/Aug 2000 called “Home Cheat Home” about “flipping scams” and how people are being ripped off. They feature an “unemployed single mother living on $12000 a year in government assistance” named “Tabatha Evans” who bought the above house. Just wondered if anyone had the other side of the story.
GL,
There were many such examples in the Baltimore area last year, the year before, the year before that, and they are still going on, however they are slowing down some because the investors who were fraudulently doing these deals are getting new homes themselves. I believe that the first investor to have been convicted in Baltimore (they were charged with wire fraud, and mail fraud) is already in jail. The word on the street is that 20-30 investors and their partners in crime (appraisers, attorneys, mortgage brokers) will be charged.
This almost seems like the norm in Baltimore because it was so widely done in the war zones which were close to up and coming and thriving areas. Hopefully it will begin to die down.
The story that you referenced I have heard many times, could just be a different name.
As someone - ok, a ‘newbie’ - who has recently been looking into real estate as a way to better build equity, I stopped to listen to this same story from Baltimore on one of the big 3 networks nightly news last Friday.
They mentioned “a unethical real estate practice called
‘flipping’ had been used” - paraphrased to the best of my memory. I also remember the round figure of $80,000 mentioned and that Ms. Evans had filed for bankruptcy. I don’t think the seller could be reached for comment. (Imagine that)
Seemed somewhat one-sided as they did not mention anything other the buyer’s side of the story