All About Mortgages

Buyers Beware of Mortgage Brokers trying to get you to commit Fraud.

I showed a buyer a house of mine a few days ago.  They were working with a mortgage broker out of Miami and he told the buyers they were all approved for a loan. 

Knowing what type of loan program they wanted and knowing what the guidelines are for that loan program I asked them a few questions.

The plan to buy the home was that they take out a line of credit on the home they own for the down payment on the new home.  After the loan closes the seller is to give them a check back for the down payment.   This is illegal and its committing Fraud.  Everyone involved with this transaction would be liable.

If you’re working with anyone who suggests working a deal like this I suggest you find someone else to work with.   Cash back from the seller must be disclosed to all parties.

The Lenders will only allow a very small amount of cash back for repairs and or property tax money.  The mortgage broker was telling them to commit fraud in that the seller after closing would provide the buyer with a large sum of money.  I straight  forward told the buyers this was fraud. 

 If you’re getting a cash back rebate in the form of a check this must be disclosed to all parties at the time the contract is written and you need to confirm with the lender who is doing your loan that this is acceptable.  Rebates in the form of helping buyers with closing costs are no problem.