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Scenario #2 Flip
$150,000 NA foreclosure sale NA $135,000 (below value due to foreclosure) $185,000 $185,000
$150,000 $150,000
$185,000 $185,000
$142,000 Homeowner sells to interim buyer for $110,000; on same day interim buyer sells to new buyer for $150,000 $40,000 The existing lender was deceived into accepting a larger loss than necessary because the offer from the new buyer was withheld.
$175,000 Interim buyer purchases at foreclosure auction for $130,000, and re-sells for $185,000 $55,000 New loan exceeds collateral value; new buyer may be straw buyer or overpaid for property; loan qualification misrep is likely.
$175,000 Homeowner sells to interim buyer for $110,000; on same day, interim buyer sells to new buyer for $185,000 $75,000 Existing lender took larger loss; new loan exceeds collateral value; new buyer may be straw buyer or overpaid for property; loan qualification misrep is likely.
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RAB11-01 Page 3 of 3