Posted by GL(ON) on March 04, 2002 at 14:46:26:
It isn’t fraud. You aren’t defrauding anyone. It is a rule of the bank, not a law. They will waive the rule themselves in some cases.
I pointed out in my very first post that it involved fooling the bank. I wouldn’t want to do it myself, and in fact have never financed anything that way. But the question was how could it be done not whether it was legal. In fact it is legal, or at least not against the law. The bank might get sore if they found out but it is not fraud and they can’t send you to jail for it.
I also described the case of a building being bought cheap because it needs repair, and being financed for enough to complete the repairs. In that case you could do over finance the property with the full knowlege and approval of the bank.