What is the main goal of equity skimming?

What is the main goal of equity skimming?

• A. To sell properties at inflated prices
• B. To collect rent while defaulting on mortgage payments
• C. To illegally resell homes multiple times
• D. To initiate phishing scams

Answer: (B)

Equity skimming primarily involves the practice of collecting rental payments from a property while simultaneously defaulting on mortgage obligations. This strategy enables the perpetrator to exploit the property without having any financial responsibility towards the mortgage. The key aspect of equity skimming is the accumulation of rental income from the property, effectively stripping the equity from the property while avoiding the repercussions typically associated with mortgage repayment. The focus here is on the financial exploitation of the asset. While other options mention various forms of fraud or unethical practices, they do not capture the essence of equity skimming, which specifically ties to the dual action of profiting from rental income while neglecting mortgage payments. This method can lead to foreclosure, leaving the property owner with significant financial and legal complications.

Equity skimming primarily involves the practice of collecting rental payments from a property while simultaneously defaulting on mortgage obligations. This strategy enables the perpetrator to exploit the property without having any financial responsibility towards the mortgage. The key aspect of equity skimming is the accumulation of rental income from the property, effectively stripping the equity from the property while avoiding the repercussions typically associated with mortgage repayment.

The focus here is on the financial exploitation of the asset. While other options mention various forms of fraud or unethical practices, they do not capture the essence of equity skimming, which specifically ties to the dual action of profiting from rental income while neglecting mortgage payments. This method can lead to foreclosure, leaving the property owner with significant financial and legal complications.