New York residents facing mortgage fraud need to protect their rights and fight the charges. Property flipping is normally legal, but sometimes, it constitutes fraud.
What is property flipping?
Property flipping is a common practice in real estate. It involves buying a property and then reselling it for more money. Usually, when someone flips a property, he or she makes repairs and improvements beforehand. It can become illegal if the person falsely represents the condition and value of the property. This equates to fraud, which carries serious consequences.
Although it’s legal to sell a home for a higher price when property flipping, doing so within a very short time frame at a highly exaggerated price is considered illegal. Sometimes, the crime involves cash-out purchase fraud, which often means a buyer makes an offer to a seller that’s higher than the list price. He or she may add a stipulation that extra funds that go over the asking price go to the buyer once the property closes. If the property has been improved, but the individual says it has, this is a scam that often results in the property going into foreclosure.
Cash-out purchase fraud most commonly happens when the market has fast appreciation, or a property has been on the market for a long time.
What are the penalties for illegal property flipping?
If a person is convicted of illegal property flipping, he or she can face harsh penalties. Sometimes, the offense may be considered bank fraud. For example, if the person used the scam in order to obtain funds from a bank, he or she can face additional charges rather than just illegal property flipping.
Potential penalties for a conviction of this crime could include as much as 30 years in prison and a fine of up to $1 million. In some cases, it’s possible for someone convicted of illegal property flipping to face both penalties.
Facing illegal property flipping charges can be daunting. Protect your rights, and fight back to prove your innocence.