Flipping Houses Without the Hernia...

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The front page story in Sunday's paper was an intriguing piece about houses (predominantly on the SOUTH side) that were being sold at one price, and being resold at inflated prices, with new mortgages taken out (at the inflated price),only to have the "new" owner find out that bought a house worth less than the original selling price with a HUGE mortgage attached (free of charge)...what a beautiful (and apparently legal) scam that's being perpetrated upon unsuspecting buyers down here. Imagine buying a house for say $15K....(the seller then goes and says "on paper" it sold for $40K) and you find out the house isn't even worth $8K).
This particular method of "flipping" houses (much different than we see on those HGTV shows) does do ONE thing...it artificially INFLATES the property taxes for a given area. That explains why I pay for a house "assessed" at $76K when we got it for $40K and it's probably worth less than $35K, thanks to all the section 8ers and HUD rentals we have around (filled with the "usual suspects"). It's not even a "white flight" issue at this point...it's more about financial solvency, and managing to get out with some $$$ in your pocket instead of cobwebs! And people are getting away with it in many instances...

We used to call that...FRAUD.

In the end, what neighbors usually wind up with is some boarded up house blighting their street with some bank out thousands of dollars. And the best part is that although it happens everywhere, the most likely place for this kind of "scheme" to occur is in neighborhoods ALREADY struggling with vacancies, foreclosures, and the like. Gee, sure sounds a lot like MY part of town.

And we all know that with vacant properties comes CRIME (big surprise there, huh?) and that drives out any (remaining) good neighbors you have left. And believe me, I know firsthand what they're saying about that. As I stated above, one result is inflated property taxes, even as the VALUE of the homes decreases. But unless the assessor's office flags these properties (which they can't seem to do with any gusto), these artificially created "higher values" are used to calculate MARKET PRICES for the area, (falsely) raising the "value" of your home, even as block after block suffers from boarded up houses and foreclosures.

But these "scammers" deny ANY wrongdoing...funny, as they're being prosecuted as fast as their cases hit the dockets.

In Cleveland alone, 59 people were indicted on 269 charges of racketeering, forgery and theft in a $3 million mortgage "scheme" involving 38 properties.

Still, our city is more concerned with a revitalized downtown while other parts of the city slip further into a financial abyss. It's no wonder Fort Wayne city leaders want money back into the downtown area...it's to defray the costs of these schemes, which are sapping millions in tax revenue from the coffers, bankrupting homeowners, and ruining lives while making a few fat cats even fatter.