Posted by Rolfe Kurtyka on December 09, 2000 at 14:42:05:
In Minnesota, several recent court cases have shown the inflating sales prices to mislead a lender is indeed fraudulent. See my post above.
Rolfe
Is this suggestion illegal? - Posted by Debby in Houston
Posted by Debby in Houston on December 09, 2000 at 13:08:17:
Have a house on market for $63,900. Have possible buyers who offered $60K for it. They have rough credit and just about $3K cash to use. Loan officer says he can get them in it with the bank doing 85% and me taking a 15% second. They pay closing w/the cash. Someone suggested to me that to lessen the pain of the huge 15% second I put the price at $65K (I know it’ll appraise ok) then after closing I change the second so that the total price is the lower amount that the buyers wanted. (If sold for 60K, bank would give $51K and my 2nd would be 9K. However, if I sold for 65K bank would give about $55,250 my second would be $9,750, after closing I would amend the note & knock 5K off. Is this illegal? (The buyers aren’t in danger of my not keeping my word to amend it, but if it’s illegal I wouldn’t want to do it that way!)
Yes it is illegal!!! - Posted by SCook85
Posted by SCook85 on December 11, 2000 at 17:06:19:
And people are going to jail for it.
Steve
Can you spell FROD? - Posted by Skipp Tracey
Posted by Skipp Tracey on December 10, 2000 at 19:41:42:
…er, FRAUD. And today, if the lender is federally insured, I believe it’s a federal crime.
Just my 2 sense.
Re: Is this suggestion illegal? - Posted by Troy M
Posted by Troy M on December 09, 2000 at 20:29:47:
Debby,
You don’t say if you’ll be receiving interest on that 2nd lien. If so, you could lower the interest as low as 0% to make up for the difference. Personally, I wouldn’t bend over backwards to get a weak credit buyer 100% financing with me holding a small second. If they decide not to pay, you have remedies, but as a practical matter, you’re SOL. (Been there) Maybe they ought to pay the higher price anyway since you’re doing them the favor of holding financing. (You did say the home would appraise for the higher price?). Just a thought. Good Luck!
Troy M
Re: Is this suggestion illegal? - Posted by dewCO
Posted by dewCO on December 09, 2000 at 18:52:25:
I agree with Ed. Are you that desperate to sell. Why not lower the price just a little, if it’s been on the market a while, to sell it to some one stronger and get your money out, if that’s what you’d prefer. You don’t say.
With this deal, if the buyers can handle the payment, why not just do it straight and set the second up for them paying you more than per month that on a 30 or 15 yr. ammortization. That way you’d get your money back faster and/or know if they are going to flake on you so you’d need to foreclose. I wouldn’t ever carry a note if I wasn’t in a position to deal with a foreclosure on it later.
Re: Is this suggestion illegal? - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on December 09, 2000 at 15:15:50:
Debby,
At any time that we do something that looks like we are deceiving the lender, we run the risk of being accouse of doing something illegal.
Your comments sound like you are willing to sign one thing and agree to something a little bit different. This could be looked at as a deception. Now this is not to say that it is not done, and done often it is. It probably is not legal.
There is one more thing to consider here. If the lender uses federal Insured funds, someone will probably want to make a federal case out of this matter. This might be pretty safe because the federal government it seems has stopped until the ballots get counted(& coubted & counted & counted). You might have a 30 year loan paid off before that happens.