equity stripping

equity stripping

A term applied to a variety of sleight-of-hand practices,most often:

• Offering to assist homeowners facing foreclosure through buying their home and then selling it back to them, usually at rates and on terms guaranteed to result in default and loss of all equity

• Protecting assets from creditors by encumbering the equity with loans from friendly creditors, such as relatives, who won't foreclose if you miss a few payments

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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