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Is this mortgage fraud!

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iceblaze

Junior Member
What is the name of your state?Texas

Ok I am posting this for a friend becuase he does not have the net. He just bought a home brand new. He got an 80/20 loan the seller agreed to do a 2nd on the house so he could get the loan. Now after the closing he tells my friend that he does not want anything for the 2nd that he got all the money he was asking for the house. That struck me as odd and I would assume that would be somekind of fraud on this guys part to say that the 2nd had been paid off. I told my friend that does not sound right and that the seller basically told the bank he would do the 2nd so you could get appoved for the loan and after he got his money he did not even care about the 2nd lean and would say it was paid off. What should he do about this becuase this does not sound good at all to me. Any answers would be appreciated.
 


Ciarraine

Member
The answer is, it depends. If the seller went to closing, signed the forms and got up from the table with a second trust, and then decided you know what? I don't want to collect this debt to which I'm legally entitled, your friend has lucked out massively. Get the seller to sign a certificate of satisfaction and get it recorded, and make sure to say thank you for getting 20% equity in a property as a gift from a kind-hearted soul.

If on the other hand the purchase price and/or appraisal were inflated to trick the first mortgagee into giving your friend 100% loan-to-value when that company thought they were getting 80%, then yes, he and the seller have colluded to perpetrate fraud.

My advice is to have your friend call his escrow/title company and go over what's happened since closing, and get the help of the staff attorney/settlement officer to sort things out and make the gift of equity official.
 

iceblaze

Junior Member
Ok here is what he said happened. The guy he bought the house from agreed to sell it for $209,000 on the contract though he said they showed it as selling for $239,000 the house actually appraised at $245,000 he said the seller made it on the contract for $239,000 because the lender would only do a 80/20 loan so if it showed $239,000 on the contract he would get the price he actually wanted of $209,000 that seems to me that this is fraud.

Thanks for any answers
 

Ciarraine

Member
iceblaze said:
Ok here is what he said happened. The guy he bought the house from agreed to sell it for $209,000 on the contract though he said they showed it as selling for $239,000 the house actually appraised at $245,000 he said the seller made it on the contract for $239,000 because the lender would only do a 80/20 loan so if it showed $239,000 on the contract he would get the price he actually wanted of $209,000 that seems to me that this is fraud.

Thanks for any answers
The terms of the contract were not actually enforced in escrow, which is almost certainly a violation of the lender's closing instructions. So the escrow agent, first off, could have a claim against him.

Secondly, did the appraiser know this story about the phony second contract? If so, there was collusion between the appraiser and the loan officer and so on.

Was there ever really a second trust? Did the seller get up from the table with a note for 20% value?
 

iceblaze

Junior Member
Yes there was actually a second at the closing but after clsoing he told him not to worry about it because he got his asking price that is why he did the 2nd on the home.
 

iceblaze

Junior Member
the seller after closing wrote him out a receipt showing he paid off the second but he actually never gave him a dime of the second.
 

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