Equity stripping

Definition

A fraudulent scheme where someone strips a property's equity through inflated refinances or loans, leaving the owner with debt and negative equity.

Example Usage

Equity stripping scams typically target elderly homeowners, using high-pressure tactics to get them to refinance repeatedly until the equity vanishes.

Origin

Modern fraud term: 'strip' meaning to remove, 'equity' meaning ownership value

Fun Fact

Equity stripping is a form of elder fraud and financial exploitation; prosecutions have resulted in lengthy prison sentences.

Source: Real Estate Fraud and Elder Abuse

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