What happens to the credit ratings of these floppers?
Many of these foreclosures were actually planned. A huge amount of fraud was going on, where a group of 5 people would each buy a house; then they would flip it to their designated "flopper", who, with the ridiculously easy lending available, would have no problem getting the $5 million in loans needed. The flopper would file for default almost immediately; he had no intention of ever making a payment. The group splits the proceeds from the 5 flips. 5 new foreclosures on the market.