Which of the following best describes the practice of purchasing a property then selling it very quickly for a higher price using an inflated appraisal?

• A. Straw buyer scheme
• B. Property flipping scheme
• C. Churning scheme
• D. Chunking scheme

Answer: (B)

Property flipping fraud involves buying a property and then selling it quickly for a higher price by using an inflated appraisal to justify the higher value. The crux is misrepresenting what the property is truly worth, so the loan or sale looks legitimate when, in reality, the value has been overstated to generate quick profit. This differs from using a straw buyer, where another person’s identity is used to obtain financing rather than misrepresenting property value. It also differs from a churning scheme, which centers on repeatedly refinancing loans to rack up fees rather than inflating a property's value. The term chunking isn’t the standard description for this scenario.