Is This Legal? - Posted by Tennessee Bob

Posted by Tony-VA on July 10, 2002 at 08:59:05:

Chances are if you have to ask “is this legal” to falsly overstate the sales price to a bank … you are in the parameters of Loan Fraud. Do this against a Federal Bank and you have a Federal Offense which means jail time with little to no credit for good behavior.

Keep business above board. Work with the seller. Maybe they can take a second to lower your banks first loan to value position.


Is This Legal? - Posted by Tennessee Bob

Posted by Tennessee Bob on July 10, 2002 at 08:34:07:

I am considering purchasing a 95 fleetwood 14x70 3 br 2 ba on 1 acre lot. The asking price is $23000. I would offer $18000 on the condition for banking purposes, that the seller shows sales price as $25000 but actually accepts $18000. I don’t want to tie up cash, and this will allow me to borrow the full $18000 from the bank on a 5 year note with no money out of pocket. I then plan to resale the MH with a lease purchase agreement for $28000 plus $1000 down on a 10 year note held by me at a minimum of 3% over the rate the bank charges me for my $18000 loan. At the end of the lease purchase agreement, on paper the capital gain will apear to be only $3000 instead of the actual amount of $10000. Is this legal or am I thinking too hard?

All input is welcome.

Tennessee Bob

No - Posted by Kevin (GA)

Posted by Kevin (GA) on July 10, 2002 at 12:48:03:

Also seems like you’re tying up a bunch of risk for a small %. Get Lonnies book.

Re: Is This Legal? - Posted by brad

Posted by brad on July 10, 2002 at 11:09:10:

are you serious? legal?no. unethical? no. do you already have a buyer lined up? if so do the legal thing and lease option it and sell your option to your buyer. what you are suggesting is fraud at many levels. and you can’t even claim ignorance because you have asked the question. bank fraud, tax evasion,(at both state and federal levels)on top of that you are asking a desperate seller to take the tax bite for you by saying on paper that he sold it to you for more than he actually did. keep being creative but stay on the legal side of it so when you are old and grey you can enjoy more than letters from your grandchildren from prison.