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http://bakersfieldbubble.blogspot.com/
Gary Crabtree, president of Affiliated Appraisers in Bakersfield, Calif., documented the practice recently for the FBI and state financial and real estate regulators. The basic scenario, said Crabtree, involves realty agents who have listed houses that aren't selling. To move the properties, they entice buyers - or friends - to "submit an offer [for the home] that is $30,000 to $100,000 above the current list price," with the promise that they'll get substantial cash at closing.
The realty agents then amend the Multiple Listing Service asking price up to the artificially inflated offer price. A house that had been sitting for months with no takers at $450,000, for example, might be relisted by the agent at $525,000.
Then, working with a cooperative appraiser who has promised to "hit the number," and an unscrupulous mortgage broker who simply wants the commission, they "change the [loan] documentation to...
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