October 22, 2006 at 4:29 PM #7763
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”October 22, 2006 at 4:41 PM #38227santeemanParticipant
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?October 22, 2006 at 5:11 PM #38230
the realtor said people like to do it so they can pay off credit cards, cars and also get $ for other property. seemed strange to me as well.October 22, 2006 at 5:27 PM #38231
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.October 22, 2006 at 10:41 PM #38250santeemanParticipant
Pure evil……October 23, 2006 at 7:46 AM #38256no_such_realityParticipant
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?October 23, 2006 at 9:35 AM #38262little ladyParticipant
My brother bought a house a couple of years ago in Vegas. He says he loves it there. He could’ve used that money………he didn’t get any.October 24, 2006 at 8:53 AM #38356PerryChaseParticipant
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.October 24, 2006 at 3:11 PM #38385MaxedOutMamaParticipant
It is fraud, if the amount is hidden from the lender. It’s a federal crime, actually, and people are being thrown in the slammer for it right now.
No matter how desperate you are, debt or BK is better than jail time. Don’t touch these schemes. Don’t.
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