Is it mortgage fraud to declare income and fail to disclose expenses? I am just wondering. Did the applicant deliberately try to mislead the real estate agent, the mortgage representative, the home seller, and herself?
Here is a single woman trying to buy into the American Dream. Well, the part of the dream that includes owning a home. She declared to the other agent that she wanted to get in on the tax credit before it expired and the agent she had been working with is not responsive to her. Like a flash of lighting the agent has her out looking at homes because the information she provided the mortgage representative would indicate she was eligible to buy a home at a certain dollar value. Heck, with the current inventory of homes available a good agent can negotiate the best deal for a buyer at twenty percent off of the asking price.
The home owner, of course, is not going to "give it away" and will try with his agent to come to an agreeable figure for getting rid of a house they really don't want. And, that is what happened to me two months ago. My listing, my seller, wanted to get the house sold and move on with their lives. Along come the buyer's agent and a pre-qualification letter from a local, reputable, lender. They try hard to get a discount and a concession but we all agree to accept part of the discounted price and let the buyer come up with the closing costs on her own. Seeing that she can do that solidifies the deal for all parties. A buyer with a prequalification letter and money in her pocket to go forward is indeed a wonderful combination to any real estate agent.
There is an attorney review of the contracts, small deposit is transferred to the attorney's escrow account and a second deposit has been deposited. The buyer does a home inspection that reveals the home to be in good repair. The township goes out and issues a Certificate of Occupancy. The sellers have begun to empty the house and then the second shoe drops. The attorney wants to delay the closing because there is a hold up in getting the mortgage. The buyer's agent declares it to be nothing just a routine check of the buyer's tax returns and we need to wait for the IRS to provide documentation. The seller's attorney issues a "time is of the essences" letter giving the buyer ten days to perform and sends me a copy by fax.
Bam! The fax is picked up off the machine by another agent and you will never guess the connection to the story. O.K., so you got it. The agent just so happens to be that "non responsive" agent the buyer ditched. Well, you won't believe the "insider" information I was provided. Wow, you are good.
It turns out the other agent had been working with the buyer for several months. She got her into a rental unit and hooked her up with a mortgage representative that had been working with her to restore her credit. That mortgage representative had declared her to be NOT loan worthy after six months because she had not taken the steps repaired her credit and co-signed a loan for her live in boyfriend to buy a truck to use in a landscaping business he had just started. The real estate agent that was "non responsive" had been sending the boyfriend business cutting lawns of vacant homes and other sellers.
As the saying goes, "No good deed goes unpunished". The agent further explained how she had told the "buyer" that she needed to see a pre-qualification letter prior to taking her out house shopping for a second time because she didn't want to get her hopes up on buying a home only to find out she couldn't get a mortgage for her again. Yes, I will say it again. The other agent had been out with her before found her a house that she had put an offer on and was told by the mortgage representative she did not qualify.
So, did the buyer commit a fraud on the "new" mortgage representative, the "new" real estate agent, and the "new" home seller/victim? Or, does a buyer have the right to expect different results if she leaves out some information?
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