How do i report short sales fraud? Help

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frank69m_IHB

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I have some neighbors that are doing the old short sales fraud thing:



100% financing. They are down around 200k. They want to do a short sale to a relative who is gonna let them live there. The guy who has the 100% financing doesn't care about his credit.



How do I report such schemes? It's these type of people who screw up the market for the honest people.
 
Not sure there is anything really illegal happening. The lender shouldn't be lending 100% right now and if they do and lose it all, its really their own stupidity. I agree that it sucks for all of us but not sure there is anything your can do about it.
 
[quote author="rkp" date=1210343138]Not sure there is anything really illegal happening. The lender shouldn't be lending 100% right now and if they do and lose it all, its really their own stupidity. I agree that it sucks for all of us but not sure there is anything your can do about it.</blockquote>




Well, it isn't the 100% financing that bugs me. It's the fact that they are buying the house back (its a relative) after a short sales. The bank loses and these guys get off scott free. And you know the funny thing about this, this dude has a new Mercedes. Go figure. Cheaters of the system I guess. I want to report it to their bank, but not sure who it is. I believe this is illegal. Isn't it?
 
I'm not sure that you should be looking out for the bank on this one. If a bank is willing to make a bad loan, that's the banks problem. As for the "intent" of the individuals, good luck proving exactly what their intent is... as the OC Sheriff explained, unless there was a pin-hole in that house, there is no way to prove it. Of course, in his case, there was a "pin-hole." As for getting off scott free, they don't, their credit gets ruined... but if an individual doesn't care about his credit and this type of thing happens too frequently, then we'll move to a more punative system which will take care of all of the POS's out there... yes, I am a big fan of the debtors prison. I'd also be in favor of the labor camp for all of these people... Sorry to break it to all of you liberals out there. =)



But again, this is the banks game. They write the rules. The assess what risks they are willing to take.
 
[quote author="GrewUpInIrvine" date=1210369856]I'm not sure that you should be looking out for the bank on this one. If a bank is willing to make a bad loan, that's the banks problem. As for the "intent" of the individuals, good luck proving exactly what their intent is... as the OC Sheriff explained, unless there was a pin-hole in that house, there is no way to prove it. Of course, in his case, there was a "pin-hole." As for getting off scott free, they don't, their credit gets ruined... but if an individual doesn't care about his credit and this type of thing happens too frequently, then we'll move to a more punative system which will take care of all of the POS's out there... yes, I am a big fan of the debtors prison. I'd also be in favor of the labor camp for all of these people... Sorry to break it to all of you liberals out there. =)



But again, this is the banks game. They write the rules. The assess what risks they are willing to take.</blockquote>


GUII - Are you sure you're not <a href="http://www.mcso.org/index.php?a=GetModule&mn=Sheriff_Bio">Sheriff Joe</a>?
 
[quote author="IrvineRealtor" date=1210375124][quote author="GrewUpInIrvine" date=1210369856]I'm not sure that you should be looking out for the bank on this one. If a bank is willing to make a bad loan, that's the banks problem. As for the "intent" of the individuals, good luck proving exactly what their intent is... as the OC Sheriff explained, unless there was a pin-hole in that house, there is no way to prove it. Of course, in his case, there was a "pin-hole." As for getting off scott free, they don't, their credit gets ruined... but if an individual doesn't care about his credit and this type of thing happens too frequently, then we'll move to a more punative system which will take care of all of the POS's out there... yes, I am a big fan of the debtors prison. I'd also be in favor of the labor camp for all of these people... Sorry to break it to all of you liberals out there. =)



But again, this is the banks game. They write the rules. The assess what risks they are willing to take.</blockquote>


GUII - Are you sure you're not <a href="http://www.mcso.org/index.php?a=GetModule&mn=Sheriff_Bio">Sheriff Joe</a>?</blockquote>


Let's just say that Cool Hand Luke was my kind of movie.
 
[quote author="awgee" date=1210368386]Taking out a loan <em>without the intention </em>to pay it back sounds like fraud to me.</blockquote>


I agree with you, but proving this is almost impossible. And very expensive.
 
Well these neighbors of mine never intended on paying off the loan. That is why they did 100% financing. They wanted to sell in an up market and make some money. Now that they are down 200k on the house, they want to get off scott free by agreeing to the short sale and having their relative buy the house. The funny thing is that there are like 20-25 family members so they can flip houses and short sales a lot between everyone. Who cares about credit rating. And short sales, credit rating goes down, but not as much as foreclosure.



So, no one knows how I can report this to their bank? How can I find this out.



This is why our housing is all hosed because of people like this and it pisses me off ..the honest people that is. People with integrity.



And like I said, they have a new Mercedes. Trust me, they can afford it. They just take advantage of the system.
 
Well unless they can get the bank to fun +200k from the value of the house, i would not worry about it. Most banks are requiring people nowadays to come up with at LEAST 10-15% of the value of the home down (and that is WITH good credit).



No worries here, i'm sure its going to blow up in their face.



-bix
 
Check out the <a href="http://www.mortgagefraudblog.com/">mortgage fraud blog</a>. Courtesy of ML-implode, <a href="http://www.michaelblomquist.com/complaint/HelpNYAG.htm">you can contact the NY AG</a>. I thought there was something on the OC tax collector's site, but I can't find it. I did find the investment report though, and I may be bringing the Chriss Street is a liar thread back from the dead.
 
I doubt that they will get 100% financing as that went the way of the dodo bird 6 months ago. If they short sell it to the bank that may take forever. My guess it will go back to the bank. I would not worry about it. All loans have gone back to full documentation and 5% down but more and more 10% down is needed even qualify.
 
DON'T BE A SNITCH!!!! if they get away with it then so be it. it is a loop hole. Look at all the millionaire who take advantage of the tax loophole. Plus a short sale is better then a foreclosure, you would rather have someone living there taking care of the house vs it being empty and nobody is taking care of it. either way it is a comp killer but what can you do right?
 
If they are doing a short sale on their home, regardless of who buys it, it's not fraud. It's just a short sale.



What are you going to report to the bank? The bank (or banks, as the case may be), are fully aware, on both the BUYER and SELLER sides, what is going on. They know it's a short sale, they know who is buying it, and they know who they are financing on the new loan.



Nothing is fraudulent here... unless there is more to the story?
 
I hope you're basing your reporting on facts. Otherwise, it could come back to bite you. In the form of a counter lawsuit.
 
We just met some people who just leased a house. They told us they recently lost their house, but the bank is allowing them to do a short sale. We literally met them and <u>within 2 minutes </u>they were telling us this story - they actually seemed proud of the fact. They also said they wouldn't have to pay the taxes on the short sale (they said the bank told them this).
 
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