I live in Las Vegas. I just spoke to my former realtor who advised me that the market is now a buyers market. He continued to say that sellers are now kicking $ back to buyers and realtors for moving a property. An example he gave me was for a 500K condo. The sellers gave the buyer $47K for buying he house. Thats almost a 10% price reduction.
He also said that he has had appraisers inflate a house price in order to get extra cash for buyers. An example he used was a $1 mil house, gets re appraised for 1.3 mil, and the buyer pockets the extra 300K.
Is this mortgage fraud? Has anyone heard of these shenanigans before? It is making me even more fearful of buying here, especially with a realtor using this sort of thing as a “selling point”
Why would anyone wanna drive up their mortgage payment, and pocket 300k? That doesn’t make sense to me. If you wanted more money you could take a second, but why do that when you are buying in this market?
I found this, which describes wha tthe realtor was telling me.
Mortgage fraud has been on the rise and more officials are getting involved to curb the increase in loss. Nevada, and Las Vegas in particular, is one of the hot spots that contribute to the $1 billion loss.
Nevada, and its glowing city of Las Vegas, is one of the nation’s hotspots for mortgage fraud. The current housing market is creating a bed of discontent that opens up many opportunities for more fraud. Investors in Vegas have been going around offering homeowners hundreds of thousands of dollars more than their home is worth, even in the present housing market.
The fraud is that buyers offer a homeowner much more than the home is worth, with the contingency to get most of the surplus back at closing. Though many sellers can smell something funny with the deal, most of them are too relieved to unload unwanted property that they turn a blind eye to the obvious fraud. And fraud is what the scenario is; buyers should not get money back at closing, especially not hundreds of thousands of dollars. In the current market, sellers have to be wary of the increase chance of fraud.
It’s not pure evil, it’s blatant stupidity on the part of the lenders. Yes, the crooks shouldn’t be doing it, but if you leave your car with the keys in it overnight at the beach, are you really surprised if it is gone in the morning?
That kind of scheme is becoming more prevalent. Sellers gets to unload the house and buyer pockets $200k and lets the house go into foreclosure. The bank is left holding the bag. Sometimes buyer and seller are in cahoots and split the money.
In a downturn, you’ll see desperate sellers turn to desperate means.
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