California Foreclosure Auctions Investigation
Allegations that California foreclosure auctions and tax deed sales are being manipulated have surfaced and the FBI is reportedly conducting an investigation. Rumors are circulating that speculators are rigging the bids at the auctions by paying some bidders to not make offers. This results in the auctioned property selling for a lower price. The auctions allow buyers to purchase properties at prices below market value.
Reportedly, federal investigators have issued warrants in connection with the claims, citing possible instances of anti-competitive activities. If the California foreclosure auctions are found to be rigged, those participating can be charged with violation of the Sherman Antitrust Act. Penalties for violating the Act include up to 10 years behind bars and up to a $1 million fine.
Most auctioned properties go back to the lenders while approximately 20% are actually bought by third parties. While rumors of the unfair practices have increased in the past few years, nothing has been proven and consumers are being asked to not form opinions until completion of the investigation.
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Tags: Auctions, California Foreclosure, California Foreclosure Auctions, Foreclosure Auctions