Posted by Lisa on December 10, 1999 at 22:24:55:
I am a beginner with all this and just wanted to know if you could elaborate on this PACtrust in California.
Long but interesting story…is this fraud? - Posted by John (WA)
Posted by John (WA) on December 10, 1999 at 21:58:48:
I had an interesting call today in response to one of my ads for owner financing. The guy tells me he has had two foreclosures in the past year and wants to know if I can get him financed. Instead of saying no, I usually listen to the foreclosure stories to see if there is a way to bail the people out and kill two birds with one phone call. So I begin to listen to the blah, blah, blah story but it begins to get interesting. Here’s his story…
The guy owned a house in the Sacramento area and wanted to sell. I didn’t get the reason but I can only assume he needed/wanted something else cuz he only moved a few miles away. So the guy responds to a “WE BUY HOUSES” ad and sells his no equity property on a wrap. The guy claims he got a release of liability from the company. I ask what company. He responds, the “company” who bought my house. I hated informing the gent that the “company” was not in a position to give him a release of liability, only the mortgage company could do that. Once his home is sold he buys another place and the “company” resells his original place on another wrap. Sometime later, the 2nd wrap buyer on the first house bails out. The “company” apparently decides they no longer want it, they bail and so it falls back into the guy’s lap. He already has a new house, so he lets it go into foreclosure cuz he thinks he’s been released from liability. After a few months he’s gettin’ a job transfer up my way and now needs to sell his second no equity house. What’s he do? He calls the “company” again to take his house off his hands. They do a L/O with the right to sublet. The guy moves up here. He’s truckin’ right along for several months and then finds out his 2nd place has gone into foreclosure. It’s behind 8K and apparently the “company” never made one mortgage payment (no escrow involved) and he never got notified.
Convoluted story I know, did the best I could. Now obviously this guy had no idea what he was doing and someone took advantage of him. Certainly what they did was unethical. What I would like to know is if anyone thinks this falls under the fraudulent category? Because no payments were made on the L/O deal, I have to believe that the first deal may also have been a scam of some type.
When I started this posting I was planning to name the dba of the “company” but I’ll withhold pending judgement from you readers. Does anyone think there is a basis for fraud here?
I’m sure B. Gatten will be waving his PACTrust banner after reading this one.
Have a nice weekend.
Is this fraud? - Yes and maybe - Posted by John Behle
Posted by John Behle on December 11, 1999 at 24:49:55:
The lease option deal would most likely be construed as “Equity Skimming” which IS illegal. It sounds like deception was involved in the other deal with the efforts they made to mislead him with the “release of liability”. The court would have to decide on both issues.
I’m not an attorney. Just a broker that has been trained in real estate law and seen a couple dozen years worth of similar scams.