Fraud Question

lionsdevotee · Joined: 28 Aug 2005 Posts: 3

A guy a work with was telling me about how he was going to be buying 2 investment properties for 30k and 35k for a total of 65k. The appraised value on each home is 60k and 65k. He said that he found a lender that would lend him 125k. He would then pay off the seller their 65k and he would have the remaining 60k to pay off his closing costs and other costs.

So my question is, is it illegal for a lender to lend out more than the selling price of a home?

lionsdevotee · Joined: 28 Aug 2005 Posts: 3

A guy a work with was telling me about how he was going to be buying 2 investment properties for 30k and 35k for a total of 65k. The appraised value on each home is 60k and 65k. He said that he found a lender that would lend him 125k. He would then pay off the seller their 65k and he would have the remaining 60k to pay off his closing costs

and the rest would be profit

So my question is, is it illegal for a lender to lend out more than the selling price of a home?[/u][/b]

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

The lender isn't going to lend more than 100% of the sales price of the property. So the only way he's going to manage that one is if they illegally exchange cash as part of the transaction. The lender isn't going to lend you 200% of the purchase price of a property right off the bat, so they'd have to deceive the lender in order to make this happen. Either that or let the lender in on it, which would of course put their job in jeapordy.

He could refinance after he's been on the title for a certain period of time (depending on the lender) to take cash out, but he's not likely to get 100% out of an investment property.

lionsdevotee · Joined: 28 Aug 2005 Posts: 3

Thanks Haplo

He told me that the title company would be cutting him a check for the remaining cash. He also said that one of his close friends is a loan officer. Now that i know that it is illegal, what can happen to him and the mortgage company if he goes through with this transaction? Does the state check on transactions like this? Can they possibly go to jail? Thanks for your help

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

It's a big deal, and seeing as how I am not a lawyer, I'd recommend you speak with one on what can happen etc. Not trying to pawn you off, but I'm not a legal expert. Title company can get in pretty big trouble for that too, unless there is some lender that is going to allow for 100% cashout on a purchase transaction somewhere...and I haven't heard of it personally.

chow · Posted: Mon Aug 29, 2005 6:22 pm Post subject:

lionsdevotee wrote: Thanks Haplo

He told me that the title company would be cutting him a check for the remaining cash. He also said that one of his close friends is a loan officer. Now that i know that it is illegal, what can happen to him and the mortgage company if he goes through with this transaction? Does the state check on transactions like this? Can they possibly go to jail? Thanks for your help How does Federal Orange look on them? It's a Fashion Jumpsuit.
Can I please have the name of this mortgage company and title company?Y

You know-I would hate to see this board get a rep for stupid questions, and a way of means to get a little side action-

If he's got a side action thing going, Can I get it on it? If he's not on the HUD1, and getting paid under the table with a check-can I have one?
Can I direct you to your local HUD field office who has control of ever single transacation by a broker-banker, or title company? If anyone one of you are not disclosing the relationship and one hand is padding another-then:

"Bingo!": Well, it's a song'game....I'll let the 20k a yr HUD workers pester the shit out of you while you spend well more than that in defense.

Is it just me-or did the college of stupid just release the Dawn of the Dead for LO's?