Inflated Contract Prices

Another red flag involves inflated contract prices, often seen in "double contract" schemes. In this scenario, two different sales contracts are created. One contract shows a higher, false purchase price and is submitted to the lender to obtain a larger loan. The second contract shows the actual, lower price agreed upon by the buyer and seller. The difference between the loan amount (based on the higher price) and the actual price is often split between the conspirators. Licensees should be wary of any transaction where the sales price drastically jumps after a recent sale (flipping) without significant renovations to justify the increase.