Mortgage Rescue Fraud Act - Posted by Marvin

Posted by Jim FL on June 09, 2006 at 10:46:33:

I just began reading this law and studying it.
Since I’m not there anymore, its a low priority, BUT, I still wanted to understand it, since folks think it will spread.

Anyway, so far, it seems to me, should an investor, like you and I, buy a house from someone in foreclosure, as long as they don’t agree to sell back, rent back, the house to the sellers, things will be fine.

Since I’ve never allowed a seller to remain in the house, so far, it seems this law would not effect the way I do business.

Then again, I’ve not read it all…yet.

Let me know your thoughts,
Jim FL

Mortgage Rescue Fraud Act - Posted by Marvin

Posted by Marvin on June 09, 2006 at 02:17:06:

Here in Illinois there is a law being introduced that would severly impact the bottomline for investors like wholesalers & retailers. It simply states that a ‘‘distressed property purchaser’’ must pay 82% of the fair market value as determined by an appraiser. Its on the books as '‘SB2349[Mortgage Rescue Fraud Act]’'This is a bummer big time! Are there any other states with similar type laws?

Re: Mortgage Rescue Fraud Act - Posted by LeasePurchase

Posted by LeasePurchase on June 16, 2006 at 06:43:50:

There are these type of laws in most states and those that don’t have specific legislation follow case precedent. Frankly I agree with and like it. They keep so-called Consultants / Investors from Stealing peoples homes and equity.

Basically these laws prohibit “Investors” from bringing an owners loan current, taking title to the property and leasing it back to the owner with the option to purchase it back later. In some states you are not allowed to purchase the property, regardless of the price, and lease it back to the owner. At least the Illinois Act allows you to purchase at 82% or more and do so.

Even if the laws are passed no one really monitors them or goes looking for Investors who violate the law. It takes a fairly substantial complaint by an allegedly “screwed” owner for any investigation to even take place. Or, in my experience, an angry Realtor that wants to put you in your place as an Investor.

There have always been Legal and Ethical alternatives for Investors to stay within these laws regardless of what state you are from and provide a True Win-Win situation for Home Owners and themselves.

These are only for sale-lease backs - Posted by Marc Donovan

Posted by Marc Donovan on June 10, 2006 at 07:28:44:

Simple, dont let the seller stay.

If I L/O to a new tenant or L/O to the old owner, it should not make any difference as long as the seller knows its a sale. But when they fall behind (they didn’t qualify anyway) they will be telling the judge and the reporters that they thought it was just a loan. “I didn’t understand all them papers I signed.”

This has happened so often that its become a hot issue. Its all over the papers here in FL. We will soon have a matching law too. Waste of tax money! I hear next session they are making hurricanes illegal. Its about time someone did something!

Re: Mortgage Rescue Fraud Act - Posted by Sean

Posted by Sean on June 09, 2006 at 14:47:14:

Not a problem… once the bank has taken it back… its no longer distressed, I’ll buy it from the bank for less… They certainly can’t claim Mr. Bank is a distessed seller.

Re: Mortgage Rescue Fraud Act - Posted by Max-Va

Posted by Max-Va on June 09, 2006 at 11:07:15:

I believe Maryland has such a law. I believe it is for preforclosures only. I am not up on it or have not studied it, but probably should as MD is close to me. Maybe some one there could give their thoughts.

Re: Mortgage Rescue Fraud Act - Posted by Tim Jensen

Posted by Tim Jensen on June 09, 2006 at 08:02:43:


I just wanted to let yo know that the law has already passed and been signed by the Gov.

I think that you may want to re-read the law. It does not say that you have to have the thing appraised, justthat you can use an apprasial as a menas to get the value. I think a BPO and assessor’s value would work fine too.

I printed outthe law and I am trying to figure a work around with it.


Re: Mortgage Rescue Fraud Act - Posted by Clint

Posted by Clint on June 09, 2006 at 06:51:21:

Define “distressed property purchaser”. This is a free market economy, last I checked. They can try and regulate everything…but it doesn’t make it right.