Property flipping is a practice which involves buying a property and then turning around, and selling it for a larger sum of money. This is legal, but can become fraud when false representations are made regarding the property’s condition and value. Property flipping crosses the line into fraud, when a defendant violates state and federal statutes. Our NYC fraud property flipping lawyers can help clients accused of fraudulent flipping, or being involved in property flipping fraud. Spodek Law Group, PC, can help you defend yourself if you’re accused of commiting a crime in the process of flipping your property.
Illegal property flipping happens when a home is bought and sold, at an inflated price. Typically, what makes it illegal is the fact there is some fraudulent appraisal, or misrepresentation, which occurs as a part of a real estate fraud scam. The appraisal may set the value of the home incorrectly, with the purpose to mislead buyers. In situations like this, you’ll need an NYC illegal property flipping scam attorney who can help. Other examples of illegal property flipping is when a cash out purchase fraud occurs. This scam involves an investor/buyer, approaching a property seller and making an offer which is higher than the list price of the home, with the stipulation that the difference in funds should be given to the buyer at closing. The inflated value is used to support the higher price, which is done by claiming that improvements were made when they weren’t. Eventually, these properties end up in foreclosure.
The FHA provides backing for loans, which makes it easy to get loans with low down payments. In 2010, there was an FHA policy change which made it possible for home buyers to flip properties quickly. The FHA normally doesn’t finance short term house flips, but the rules were relaxed in order to stimulate the repair, and sale, of neighborhoods which had been hit hard by foreclosures. Prior to this change, the FHA required investors or rehab specialists to own a home at least 90 days before reselling it at a higher price when using FHA financing. The FHA waived this rule, which made it possible to resell properties quickly. The FHA however reinstated the 90 day standard, as of 12/31/2014, making it more difficult to engage in FHA property flipping.
Our NYC illegal property flipping lawyers can help you avoid penalties and help dismiss charges where possible. Penalties can vary, depending on the circumstances. If the transaction involved banks, which makes it so that it can be considered bank fraud, then this can result in higher penalties. It can lead to federal criminal charges, which means 30 years of imprisonment, a $1,000,000 fine, or both. In addition, the defendant can be charged with mail fraud, and wire fraud, under federal law, in addition to residential mortgage fraud under Article 187 of the New York penal code.
Our New York property flipping fraud lawyer can help with all sorts of cases. We can provide legal help if you’re charged with a wide array of offenses related to the illegal flipping of a property, and real estate fraud cases. We can help convince the prosecution that you did not violate the law, and have charges dismissed against you.
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