I had a client that was in the middle of a short sale when the bank started investigating them hard for mortgage fraud. Now when they filled out the loan documents, and signed at closing, all the information was true and they didn’t see any changes on the horizon.
Fast forward to today when they have lawyers contacting them daily and are threatening them with jail time for mortgage fraud if they don’t bring their account current and continue with this short sale. Now, what is happening with this couple is probably happening with thousands of others across our country and the banks are just using scare tactics to try to get their money.
Here is what happened. My clients bought this home and onthe loan they put that they made “X” amount of money and that this was going tobe an owner occupied property. Both these statements were true at thetime of closing and they certainly had no intention of moving for years. But,as we know, the best laid plans don’t always work out that way.
Six months after moving in to their new home, the husband gets called in to his boss’s office at work and is told, “Sorry, the company is closing its doors here in Oregon and we are moving to Montana. But, we like you and we want to keep you with the company. If you will move to Montana,we will give you your old job, but there will be a pay cut since the cost of living there is so much less.”
So, of course the husband, having been with the company 15 years, really didn’t have a choice as there are not a lot of jobs here in Oregon, especially in his field of work. So the family packs up their things and moves to Montana and rents out the house because of the market dropping. If they sold now they would lose close to $50,000 with commissions.
However, after about a year, they realize that they were losing money every month and that if they didn’t sell they were going to loseeverything including their car and possibly the place they were living now. So, they decided to contact me about a short sale. I got their financial information and forwarded it to the bank and started the short sale process.Well, after the bank got the information they said they weren’t going to accept a short sale on this property and that they were proceeding with mortgage fraud against the sellers since they had got the property as an owner occupied loan and were now renting it out.
They have been in contact with a lawyer and the home has been off the market for awhile, but my question to you is, do the banks realize how stupid they sound when they go after someone who is just as much of a victim of the economy as they are?
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