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The "gift of equity" and the "loose fly"!!

Earlier today, I received a call from the Realtor/Mortgage Broker(RMB) on one of my pending deals. I was kind of expecting it but was hoping it would happen sooner rather than later. You see when this guy called me about a month ago, to let me know he was sending over an offer for one of my listing, the caller ID on my cell phone read FRAUD!

When I was speaking with him I couldn't for the life of me remember why I had his number programmed in as FRAUD! Anyway, since it was an office number, I decided to give this guy the benefit of a doubt and we negotiated an acceptable deal with my Seller. I did all of my homework and actually had one of my trusted mortgage brokers review the Buyer's situation. All looked good to go.

The Buyer was getting a loan of 100% through Country Wide with the Seller paying 3% towards closing costs. Anyway, to make a long story short, CW denied the loan yesterday. Today, the Realtor/Mortgage Broker (RMB) called to let me know we could still get this closed if the Seller was willing to do a "gift of equity". It seems the appraisal came back at $187,000 and the agreed purchase price is $150,000. So RMB's bright idea was to inflate the contract to $180,000 and have the Seller write a letter "gifting" 20% of his "equity" to the Buyer.

RMB assured me this was perfectly legal as long as the Seller was a family member of the Buyer. Well OK then. Not only we will inflate the purchase price by 20% but we will also have the Seller lie and say he is a family member!!

Nope can't do that. The property is back on the market and NOW I remember why his phone number was programmed in as FRAUD! I just changed it by the way to FRAUD2! Next time I'll remember.

A little later today I received a call from the REALTOR® on one of my other transactions. This has been a very difficult transaction as the first Lender went out of business and we had to change Lenders about a month ago. Also, we are working with a Down Payment Assistance Program who is granting the Buyer $20,000. After providing them with tons of documentation we finally were within about 10 days of getting this deal closed.

The REALTOR® says, "The buyer has decided not to move forward with the closing." I say, "What the......!!!". The REALTOR® explained to me that Mrs. Buyer came home from work early yesterday and caught Mr. Buyer in bed with.........!!! Well just use your imagination on this one. Let's just say they ain't closing on this house. They will be meeting with an Attorney but it won't be to discuss real estate!

The moral of the first story is: "Don't ask Broker Bryant and his Sellers to commit FRAUD! It ain't happenin' on my watch."

The moral of the second story is: "Please keep your fly zipped until AFTER you get your house!"

A day in the life of a listing Broker. How was your day?

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 12/05/2007 05:16 PM

Comments (54)

mortgage fraud, poinciana fl

This post has been included in Florida Information Osceola County, FL Information Poinciana, FL Information

54 Comments on The "gift of equity" and the "loose fly"!!

DEC

2007

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Blog Boy...

I'm confused.

Who is giving who "Equity" ?? :)

TLW...ROAR!

The moral to story # two is he must be glad now that he won't have to give his wife the house. Seriously, This really stinks, we have had boyfriends and girlfriends breakup while negotiating but never right before closing. I feel for you BB. It's got to get better soon.

oh my oh my, wats that word? NEXT................... releases our frustrations. hope your day tomorrow is better.

My first thought was that I had two deals with CW this year (my sellers) and both were nightmares. So I feel your pain (luckily mine closed, so I don't feel that much of your pain, but you get my point, I hope). The ultimate breach of contract (to your sellers, and to Mr. Buyer's wife). I don't recall any contingencies for cheating husbands! Hope that attorney can push for specific performance or at the very least, make sure that a big fat earnest money check gets handed over to your sellers. :(

I just had to come over to see what was going on with that title! :) Looks like it was a whole lot more than real estate on that 2nd deal...

Sorry to hear about your story with Mr Fraud2, argh! : ( And Mr footsy buyer too.... Still, I am not sure my day is going any better, here's hoping tomorrow is a better one!

Holy cow. My day wasn't nearly as exciting as yours. I'm a little jealous.

Hmmm...my day...I can't even remember. Oh yeah, we set the closing date for my last deal of the year...Dec.28. I called the closing attorney just to be sure he would be in town. We are golden...for now.

Bryant - did you tell the FBI and your real estate board about RMB's proposal?

Hope you had a large earnest money deposit on Story #2. I've often told clients, "don't buy or charge anything until after you close" but so far I haven't needed to make any suggestions concerning their zippers. Only in Poinciana! Does what happens in Poinciana stay in Poinciana?

I spent $660 for tires on my vehicle this morning.

It's snowing.

I have a buyer that offered $875,000 on a $1,144,500 house. Have they lost their mind??

I have a buyer coming from California to buy a home in Virginia. I found out today that the husband is an agent in CA. The last time I worked with an agent from out of town, they surruptitiously got a VA license behind my back and, after I did the birddogging for them, bought a new home without an agent as soon as they arrived in town.

How do you think my day was?

Your market is going to make me keep the light on all night.

I feel your pain!

Bb,

At least I know I'm not the only one....if you remember the 87,500 which was 25% and no relative:) at leat you might have had a relative:)

Just me, but I'd be keeping the deposit on deal #2. R

Well all I can say is...maybe you should deal with cash buyers who are celibate!

Well aren't we having fun now? I forgot the $90,000 verbal "offer" on my $129,000 listing which is already priced $30,000 below the next best priced. It's a condo for Pete's sake they are all identical!!!The guy has cash though so I guess figures that will get him an extra 20% off. OK it's bedtime. I'll be back in the morning.

Good night Bryant. You deserve a nice back rub from TLW....sleep tight... tomorrow will be better.

It ain't closed till its closed.

I heard about a deal not that long ago where the seller , seller's realtor, and buyer's realtor were sitting at the closing table waiting for the closing. The seller opened up the newspaper and was reading an article about a Postal Worker that got shot by a disgruntled elderly man who didn't receive his social security check. The seller turned to the 2nd page of the article and low and behold, the Postal Worker was the BUYER!

Hopefully you get a cash offer tomorrow :)

Jeez, this marketing brings out some doozies. Screwed out of one deal, and ran up against fraud in another. Should'a thrown them both in the old gator pond. Know that you both are doing just fine otherwise, though. When one door closes, another opens.

best

Broker Bryant...kudos!

I'd hate to see ya behind bars. :)

™

Actually, it sounds like he was screwed out of both deals ...

- James

Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) Realtor/Mortgage Broker(RMB) ...

Nope, no matter how many times I type it (or Ctrl+L it) it still comes out the same. I guess you know where this falls on my HIT LIST. Right ... NEXT. Whisper a name to me ;)

What part of lying don't people understand? If you are lying to get a loan to close then you are committing fraud!

A few years ago my last principle broker caught his client in their vacant home with his secretary. It is amazing what people will do, when they don't think they will get caught.

BB - You are obviously on the high road and good ol' RMB is in the ditch. Good call!

And as for that tricky fly.......at least she didn't shoot him.

So, just another day in the life of Broker Bryant and TLW. You sure know how to pick them.

Wow,

I could write about 100% LTV's with the seller paying closing cost, but I don't write friction.

I could write about redoing O & A's, but I've done that.

I could write about "Gift of Equity" a great, but rarely useable tool. The reason being you have to show a relationship between the buyer and seller.

I could write about real estate salesman acting as mortgage people on the same deal! But, I've done that and horror stories are best saved for Halloween or bound fires with kids.

I could write about making notes to yourself and then ignoring them. I may do that for April first!

I could write about even the best of us wanting to give everyone the benefit of a drought, but with my spelling I might come closer to the truth than intended.

I could explain that "RMB" is not one of the designations I recommend. "RMB" Recurring Moral Blight, it's a social disease, normarly accoumpanied by written and oral defecation, but that's a crappy subject.

Sorry, Bryan, I just can't tell you what I think of this.

Bill

William J Archambault Jr

The Real Estate Investment Institute

First National Mortgage Sources

DEC

2007

The moral of the second story is: "Please keep your fly zipped until AFTER you get your house!"

My sympathies also Bryan...this is great to add to the list of "Things Not (or TO DO) after you apply for a mortgage. It's tough in the trenches, isn't it!?!

I am amazed with all the news stories and information out there these fools are still running around trying to commit mortgage fraud.

I "code " all the numbers in my cell the same way! If enough time goes by I am always surprised when "St Bartholomy Scam" calls me again.

Oh, for pete's sake, amazing there are still people pulling this ka ka. Even with all the bale outs and restructing by the fed's going on. Don't get me going on this one.

Have mercy. Every day is an adventure...some more than others. Hope today is better!

Cheers,

Heather

Good morning everyone. You guys are cracking me up with these comments. I think Bill came up with a good one: "RMB" Recurring Moral Blight

You know you would think with all the mortgage crap going on right now that "fraud" would have slacked off a bit. But I assure you fraud is a live and well and may be even more prevelent than it was. I see fraudulent ofers afnd get fraudulent request at least once or twice a week!!!

The sad part is the buyer for this property is a perfect candidate for FHA with a Nehemiah or Ameridream program tied in. They can purcahse this property with NO money and it doesn't require my seller to lie to do so. They can also get USDA Rural Housing financing on this property. The problem is the RMB is not familiar with any of these programs so decided to try and commit fraud instead! His ignorance will lead his buyers into comitting a felony!

OK I have to head out a day of appointments but will be back.

Bryant, I am with you. I don't look good in stripes. I have a new one for you.. I have had several emails from companies giving people the down payment. (So this way it is a gift and not borrowed funds) then they tell me to make sure that I use a lender that does not require seasoning of funds. Than at the closing table the seller repays the company. Yes they inflate the price of the property... When I spoke to one of the individuals I told them I understand that technically it is not borrowed funds but the problem is I have knowledge of what they did. So now this becomes a problem... I don't want to be in the cell next to you..lol

I'm afraid, very, very, afraid. LOL love the outfit!

Wow BB what a day for you. I have had some mortgage brokers like this in my experience and the deal never closes.

As far as the hubby with his pants unzipped - wifey is better off finding out before she is in debt for half the house and has to spend more money to fight in court to get it away from him.

BB - Mortgage Fraud is as big as ever in this challenging market. Doesn't it feel good to do the right thing.

The unzipped fly story is crazy. This guy is in a lot of trouble, and probably wishes he only committed mortgage fraud.

BB : I just can not figure out why MB's think that this type of funding is okay. With all of the overt conversations and news play mortgage fraud gets, it just astounds me that someone would call you with this out and out blatant attempt at fraud.

Sorry about your second sale. Unless the Buyer has no other outs though I would keep their feet to the fire. After all most couples do finally work things out even in matters of infidelity.

BB - Two very interesting stories. It sounds like there is a lot of that goes on down in your market. I don't see much of that where I am most likely due to prices differences in our markets. It amazes me that mortgage brokers are willingto risk their license like that over one measle deal - JUST CRAZY!

What a fun day! Fraud and infidelity... sounds like daytime TV.

I am not surprised just another day in the life of any practicing real estate broker.

Great post. I wrote a post on my blog about what not to do after you are approved for a loan. I never thought about infidelity as being something I should mention. Maybe I should go back and edit that post, just in case it might save a deal or 2.

Ah!! Yet another victim of the "Zipper-Gate" scandal huh? I haven't encountered that one yet, but if I do I will think of you! LOL!

that photo is just too much!!!!!!!!!!!!! hehehe

I am voting for Moral Number 2 ... But at least that is a better reason for not buying a home than the number of buyers that buy new cars before closing thinking that the loan company has already pulled their credit and won't check.

DEC

2007

Great Story! Sounds like a real soap opera down there.

Wow...and what a day you had.... Two for the price of one....lol....Fraud and zippers. I don't think either one of them go together....

Hey Bryant, now who was it that said this job was easy?? My day went well...but we do all have those days, perhaps not to that extreme. Thanks for sharing.

Excellent post. It never ceases to amaze me how some individuals feel the need to re-invent Real Estate. Hope he finds a nice cozy rock to crawl under.

Bryant, I agree with TLW...to confusing to even consider. The photo is killer. The title is too good which you always do and this market has too much silly stuff going on. Your comment on how many options are available to the buyer is the key point. Thanks for a good post and the great comments. Always a joy to visit!

Bryant: It's amazing that even with the glare of the spot light being leveled at the mortgage and real estate industries that this guy would try that. Wild!

Sorry to hear about your other deal. I had one like that happen to me...as a matter of fact, I'm going to write a post about it....

Bob Mitchell

ValueList Real Estate Services, Inc.

I love James' comment -- screwed out of both. You can program your cell for cheating-buyer-husband as CLAWED.

Howdy folks!! I guess I have been a bad blog host. Sorry about that. Been trying to squeeze in work and blogging between watching TLW unpack. :)

Ok I love "zippergate" very funny!!

I guess our disclosures now need to read:

Don't spend any money.
Don't run up your credit cards.
Don't buy a car, boat etc....
And please keep the zipper up.

Hey I just posted a follow up to this one.

http://activerain.com/blogsview/299621/Be-ignorant-or-be

You DO lead an interesting real estate life, BB. The Poinciana Soap Opera.

Jeff

JAN

2008

Okay now this is a great post and I'm glad I have found it. I love many parts to this blog and the fraud phone number. What an idea. Just a note to self...when this guy calls think fraud.

I personally thought this blog was great. Thanks for sharing; we learn from the difficult times as well.

Oh and the story about the zipper....oh you are too funny!

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