Properties purchased through Orange County Clerk of Courts foreclosure sales at one price are appearing in the county Property Appraiser's Office records at a higher price, often tens of thousands of dollars more, according to an Orlando Sentinel review of 16 recent purchases.
How is this happening? You're supposed to pay doc stamps on the deed. That's a percentage of the price paid. What's occurring is that the buyers are intentionally overpaying the Doc Stamps.
This would then turn into a higher tax assessment. But - I suspect - the buyers aren't intending to hold onto the property for that long.
See, there's no government record - officially anyway - that shows actual sale prices. But you can determine it from the doc stamps, since it's a percentage.
Anyone care to guess what's going to happen here? Those buyers will then flip the properties and support the price they're asking, and getting, with these bogus doc stamp payments.
The phony sales prices could be skewing appraisals being done in those neighborhoods and influencing bank lending practices as well, said Orange County Property Appraiser Bill Donegan.
Yep. You betcha.
There's two potential frauds here:
- The new buyer gets screwed by a bogus appraisal (where have we seen that before?)
and - The government potentially gets hosed by a false claim of lower capital gains on the resale than otherwise happened.
Isn't that nice?
Buying a house that has been held by the current owner for less than a fairly serious amount of time? Demand to see the previous HUD-1 and an affidavit that it is true and correct under penalty of perjury. Falsifying that is a federal offense.
Thus far it appears that intentionally overpaying doc stamps isn't against the law, but intending to defraud either the government or a new buyer certainly should be.
Where do these come out again?
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