Posted by John Corey on May 16, 2006 at 04:34:00:
If no lender will approve the deal with that much cash back that should tell you something. If you work with the buyer to hide the payment (likely making the payment outside of escrow) then it would be actively participating in fraud. It might be found that you aided in the fraud and are therefore knowingly participating in a criminal act. Criminal act -> possible jail time. A federal crime in most cases.
There is nothing illegal about a large cash back. Creative financing can involve cash back or other ways to make a deal work where the financing is not conventional.
What is illegal is when someone has to cheat, steal, deceive or otherwise cross the line to make the deal work. In your example the ‘crime’ has nothing to do with the cash. The crime is that the lender has to be lied to and material facts hidden for the loan to be approved.