Sep
21
Is it mortgage fraud?
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I knew someone with a $300k house, $275k mortgage….not yet in trouble with mortgage. He goes out to buy an investment property..rents it out for a few months….starts to default on his OWN mortgage….moves to the investment home…and bank forecloses on his first home. His mortgage was wiped clean…..and he’s living comfortably in “investment” home..less a lower mortgage payment.
Is that fair?
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6 Comments
December 29th, 2009 at 1:34 pm
It may not seem “fair” but it can be legal. I would bet that he is not living comfortably in the investment property. He would be there only because it is cheaper. If you think it is fraudulent then report him to the police.
December 31st, 2009 at 10:51 pm
Who r u to judge? is this affecting you?
January 3rd, 2010 at 12:23 am
When you say whiped clean, what do you mean? His credit is trashed, he is going to pay the price next time he wants to buy anything from a car to a new house.
January 4th, 2010 at 10:23 pm
If you thinks it’s fraud, you would report it to the FBI, not the police.
Here’s the FBI fraud website to report it:
January 8th, 2010 at 3:08 am
To him it is. People are getting creative to avoid foreclosing…some are even turning to arson. May be he knew in a few months he would not be able to afford the $275k mortgage and if he defaults on that, nobody would approve him for a loan, even renting would become a nightmare with his tarnished credit. There are people who are walking away from their houses too. The way things are right now only the lenders are being bailed out, those who need help the most, the homeowners, are being left high and dry. Sometimes you either get creative or the system gets you.
January 9th, 2010 at 8:47 pm
His mortgage might be wiped clean, but the slate isn’t. He paid a higher interest rate on the investment property, and will be stuck with that rate until he improves his credit which is now trashed. He is going to pay more for everything based on credit score. And their might be a deficiency judgment in the hopper from the first home that will haunt him down the road.