Short Sale Fraud?

The government program HAFA has strict guidelines concerning buyer responsibilities in a Short Sale.  As mentioned in our blog yesterday, the buyer can have no personal connection to the seller or lender in the transaction.  In addition, the buyer may not receive any funds from the transaction so no seller concessions can be demanded.  Lastly, the buyer cannot sell the property for 90 days after closing.. This is designed to prevent "flipping" of property.  These programs are aimed at homeowners, not investors.  There has been some issue of fraud being reported where a property is resold at a higher price a mere 2 months after closing as a Short Sale.  However, in these examples it is likely that the property was distressed and sold at a reduced rate.  The investor poured time and money into rehabilitating the property and then sold it at market value.  Should investors be able to take advantage of the current market?  Holding a property for the full 3 month time period could eliminate all the profit.  Improving properties and getting higher values for them increases the property values in a community which is good for everyone and is key to the housing recovery.  What do you think?