On June 11th the Wall Street Journal published an article titled "Some Buy a New Home to Bail on the Old", the article discusses the fact that some homeowners are buying a new home claiming that their existing home is being rented and then simply letting the first home go into Foreclosure. The article even states that some are being "coached" through the process by real estate agents and brokers.
Can you think of more unethical and fraudulent behavior?
I understand the need for lenders to consider a person renting out what would be their primary home in order for the borrower to purchase another primary home ... but if the first home goes into foreclosure right after the second home is secured than their should be some recourse. Fannie Mae is adjusting their guidelines to accommodate this situation which is not widespread, but their should be some serious laws against this type of fraud; think about the fact that you the taxpayer are going to be covering this cost.
Agents and mortgage brokers that participate in this process should have their licenses revoked.