Seller Agrees to tear up Note at the table - Posted by Leobrian

Posted by John Smith, IV on October 09, 2003 at 10:27:21:

I guess that no one can stop the seller and noteholder from selling his note at the price that he wants.

If you don’t leave any paper trail, and you a year later buy a 20K note discounted for 1K…then I don’t know.

You need to consult a lawyer.

For those who pay taxes, there might be tax consequences. Consult your CPA as well.

But if there is a signed agreement and it is proven that in fact the noteholder never had plans to collect on his note…BORDERLINE!

Seller Agrees to tear up Note at the table - Posted by Leobrian

Posted by Leobrian on September 28, 2003 at 10:00:49:

I am a new investor and I have a deal that is closing soon with 73 cents on the dollar due to the seller at close. To do the deal -no money down - I had the seller sign a offer letter accepting my price. We then submitted a contract to the bank for the full retail price of the house - the Idea being that the 80% loan that is expected would cover all closing expenses. To complete the deal the bank wants to see the remaining (27%) down payment at closing. The seller and I have already agreed to do a note to cover this. My question is … how can I be sure that the seller will tear up the note “at the table” and more importantly how do I make sure the seller returns the proper amounts to me at the table?

Re: Seller Agrees to tear up Note at the table - Posted by MC

Posted by MC on September 28, 2003 at 22:26:22:

Believe it or not, a lot people have gone to jail for doing this type of stuff. If you can’t do it right and legal, don’t do it. However, if you’re not afriad of going to jail and putting an end to your brief investing career, go ahead and do. You’re on your own, don’t ask any of us for advice please.

Re: Seller Agrees to tear up Note at the table - Posted by RichV(FL)

Posted by RichV(FL) on September 28, 2003 at 19:24:28:

Leobrian,

What you are going to need is a good lawyer. Thats called loan fraud my friend.

Good luck…you’re going to need it.

RichV(FL)

Want us to conspire to defraud? - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 28, 2003 at 13:08:42:

Leo Brian-------------------

What are you trying to do, get people who post here indicted for conspiracy to defraud? That would be so if they help you.

This activity is known as loan fraud.

Good Investing*Ron Starr

Re: Seller Agrees to tear up Note at the table - Posted by Leobrian

Posted by Leobrian on September 29, 2003 at 07:11:53:

Thank you all so much. The reason I posted this question was because this did seem a bit strange. But for some reason I recall seeing / hearing this tactic in creative realestate financing. Other than starting over, is there a way to right this deal? I’m due to close this week.

Re: Want us to conspire to defraud? - Posted by Jerry Martin NC

Posted by Jerry Martin NC on September 28, 2003 at 19:45:48:

Take another look at your deal and try another lender. You and the seller will go to jail if you do it this way and get caught. Do it right or don’t do it…

Some other Banks… - Posted by John Smith, IV

Posted by John Smith, IV on September 30, 2003 at 23:41:20:

Some banks/mortgage companies will lend you 80% of the appraised value with you putting down a down payment.

But if you try to do a note, to then have it torn at the table, it is called fraud.

Re: Some other Banks… - Posted by Carl

Posted by Carl on October 08, 2003 at 12:13:47:

Can you buy back the VTB? For example buy it in a year for a fraction of the value? Is that still loan fraud? Just curious!