Latest in mortgage fraud: Flopping
http://money.cnn.com/2012/10/23/real_estate/mortgage-fraud-flopping/index.html?source=cnn_bin
I had heard a bit about this before but didn’t realize it had been dignified with a name. The main issue I see here is that the IRS has the capability (that I believe Congress has temporarily disabled) to assign as ‘profit’ the difference between the mortgage owed and the short-sale price and then send a tax bill. Thus, it seems that these ‘floppers’ might be lining themselves up for a rude awakening at some point.
