This happened a few decades back when banks would overprice the real estate that they had repossessed. In effect, their Credit Investigators would tend to increase their valuation of new collaterals for mortgage. Some smart people that were selling their houses would apply for a mortgage on their property and get a high valuation and thereby a loan amount that is almost equivalent in value to their selling price. In short, those properties that wouldn't sell would be used as collateral for morgage and have it forfeited by the bank which, in effect, would be on the losing end.
Wow, well I really don't know anything about that. THere are a lot of bright people out there that will figure ways out around the system. What these people did though doesn't sound completely legal, but maybe it is. It sounds like a lot of paperwork, and you better hope your credit is good. I don't think that is something that would work in my case, but really I have no idea.
Just a few houses away is a big structure with about 8 rooms intended to be a condominium. The owner mortgaged it with a bank for 11 million but left it in that unfinished state. The bank had forfeited the property late last year and now it is just there and no prospect of being bought. The design of the structure is not desirable to the eyes since there is no garage to speak of. A big house like that can never be used properly. By the way, that structure was already there when we moved here in 2001.
