Im having a situation right know where I need to decide what I wanna do with my life...Im 21 years old im a chef and love the restaurant business but im passionate about buying and selling..I really want to become a invester I met this guy well years ago who I trust and I always new he flips houses just never got involved with it...Basically over the past 6 months we have been discussing, and he owns houses right know some are occupied with tenants some are not which he is looking to flip...He deals with all pre-foreclosures...He decided in a way in which he can make more money because no one can buy 5 properties a month in there own name, he finds people with good credit over 750, and he buys the house with their consent and all their signatures for buying the house..He collects half, now also keep in mind that he puts up all initial cost, so there is no money out of that person pocket..So in my case im 21 years old have good credit and been talking to this guy for months about buyign a house..we have a house where it is appraised at $600k, and we are getting it at $490..At the closing I get a lump of cash and at the selling time i get a lump of cash all which I would split 50/50 with him because he put up all the cost...At 21 years old as a stepping stone putting anywhere from 25k-35k in my pocket is pretty good, and I think its a good way to get into this business by having a mentor, but I wanted to see what you experts have to say about this....Legit or scam artist?

Go do a little research and try to understand the difference between "appraised value" and "market value". Also look around the internet and get a clear understanding of the definition of an "appraisal".

Then, ask him to show you a copy of the appraisal report.

Realtyeyes

Well I trust this ugy and I already spoke with loan offericers about getting the loan...We are not going to sell it at 600k cause the market is not that good right know...We would sell it with at least 25k equity still in the house...Other then that would you say thats a good stepping stone for a younge 21 year old looking to get into the real estate investing business?

Let me give you a piece of advice that will save you from bankruptcy: Don't be a motivated buyer!

I hope you can afford to pay $3,000 a month on a vacant house because with your name on the mortgage guess who's responsible for those payments if the house doesn't sell.

As realtyeyes pointed out, appraisals are often worthless, especially in a declining market. You need to find out what the house could actually sell for and then you need to buy it 50% below that.

Could be risky! First let’s analyze all of the cons okay?

You've only known this guy for a few months

It's your credit on the line

Do you even have proof that this property is appraised for 600? Meaning this an immediate amount of equity in this property?

Where are you located at? In most circumstances the RE market is going through a correction/adjustment phase, meaning, just because it's being sold as is for 490 and the supposedly 600 appraisal doesn't mean jack sh!t, it's not the same as selling price. So do yourself the favor and conduct your due diligence, assuming that you haven't already.

Instead of being the one duped, become like Dick Tracy and investigate your situation. Although it sounds great on paper right now, future repercussions may be totally opposite. Just like with anything in life, if your prepared and viewed it from every possible angle then you'll not only have all the bases covered but you can actually come out ahead.


Did you know that saving your credit essentially will take you 5-10 or more years, to get back to where you're currently at in moment?

I stand corrected but this is the way I see it, some” investor" know it all, finds a young naive kid, Hey you wanna make some money, Here I'll take care of everything, pay your mortgage etc etc. Just sign on the dotted line and you'll get half of the stakes. Being 21, WOW.... lots of money where do I sign?... Do be offended but that's the cliff version story of what I've heard before, of course a little different and circumstantial.

But hey you have to realize that you may be in it for the long haul. I'd say that if theres that substantial amount of money to be made I'd ask for at least 50k off the bat, without waiting for the traditional 1-5 years turnaround till you get you share. By that time worst case scenario is that, the guy just cashed in on his RE commission miscellaneous fee etc is nowhere to be seen. Kind of defeats the purpose of being a made or somewhat made man at 21 doesn't it? Instead of living the American dream of home ownership... you'll have to wait until your rapport with the lenders has redeemed itself.

Either way, it's great that you've got your guard up and have somewhat of a defense fortress up, seems as if you have a fighting chance to slug it out her early in the begining. Just don't forget this" investor dude" is more experienced and slick when trying to capture his prey so be WARY be very "wary!

Once again, if you have a contract stating that he too is responsible where he can at least be added to title so that it's not only you but his butt on the line as well then maybe just maybe it could be worth it, not of course until you've figured out that you come out ahead as well as having an exit strategy available.

My 02. Cents

weary means tired.

you mean leery. which is suspicious. or WARY which means cautious.

sorry, I couldn't resist. I see a lot of people confuse them and it just...begs me to fix it. lol

Be very wary and leery or you will end up weary with your debt! LOL

Here are the problems...

1. You are on the hook for the mortgage. Unless you have an extra $5,000+ to drop on the PITI while you flip the home this will not work for you. Make a mistake and you're going bankrupt.

2. The spread is fairly small... a good flipper is going to buy around 60c on the dollar tops... your buying at 80c. All of your equity is gone in a year once you figure in transfer costs.

3. Want to get in the business... find a home you can get for no money down under $150,000.

Whats stopping someone that busy from buying more than 5 properties a month? Sounds like an excuse to lure in the bait.

if it sounds to good to be true. jsut like merkaba said. how can he need someone to spot him if he is raking it in?

i would not go for it, to much risk for my blood i fold!

Sounds like a classic scam. He can't buy more than five houses a month so he needs some sucker to sign on the dotted line. Why can't he buy more than five houses a month and what does he need from you other than your good credit? I think you could kiss your good credit goodbye.

Okay changed it already, so I suck at spelling geze luiz, btw why'd you change your avatar Mrs. Lisa?

Cause, Miss Jane really looked like an unDead person - so pale. I sent her out to get some sun and some color.

thx for changing it. guess I'm in a persnickety mood. lol. sorry...

I understand what all you guys are saying...However I have known this guy for years not months...We just been talking about the real estate for 6 months...This guy does not have a license and is basically a investor, he knows many realtors,and every house he bought sold..Im located in the New York area...My boss actually is how i met this guy and he made in 2 1/2 years $275k with this guy no money down....He is not on any deed or title, but we have a contract between us that he will pay the mortgage for how ever long it takes to sell..We are each getting about 12k at closing the mortgage is going to be a little less then $3200...So whether this guy as you guys said could screw me I can cover months of the payment and just sell it at the price that will break me even, for a quick sale..I forgot to add, this house is a 2 family 6 bedrooms house thats split...and there are 2 sections 8 in there paying the mortgage, so the house is self effifient..He keeps telling me I should keep this house long term, but I just want to make quick cash and flip it so he said ok...

Agree with majority of posts here. My husband rehabs homes for a living and he would NEVER have somebody else's name on the deed. Find out what's stopping him from putting his name on the title and why he is looking for a dead weight (no offence) parnter? Do your own homework, don't just take his word for it even if you've known him for a few years. Find out how much similar properties sold for in the area. How much will you have to put into the house? Closing costs, etc. Is it worth it? The best properties to flip are cheap. Don't know where you are, but we don't look at anything over 150K, sell them for roughly 250-300K based on property.

Im located in New York, he puts up all money for closing cost, nothing is needed to be done with the house, its a pre-foreclosed house......it had 1 section 8, and the other owner couldnt pay rent for the house...We just recently got another section 8 thats going to move in once we go to closing, so the house is going to be self sufficent.

... on the other hand, the courage to execute when the opportunity arises is what makes most winners. Since you have the conviction, go for it and update us later.

But I must advise you again that you need to study and understand some of the market fundamentals; and an investor is doomed to failure without a firm grasp of the market trend and
cashflow considerations.

12K represents 4 payments in this case ... as this market trends downwards, six to nine months could become "normal" periods for a house to sell.

Let me tell you something that I have learned: go with your gut.

Your gut is telling you to step away, and at least think it over that's why you put it here for advice. Your title says it all - you are worried about being screwed. Listen to that.

Nothing worth anything in life is free and easy. If it is, it is usually a scam. You might get lucky - who knows. If it were me, I'd say "thanks but no thanks."

There are taking risks, and then there is being foolhardy. I think your instinct is trying to warn you that it's not all exactly as it appears.

You've "known" him for two years. what do you mean by "known" him? Is he a good friend, someone you'd trust implicitly? How about your boss? How much do you trust your boss? Believe it or not, people will try to screw people they know for money - I have seen it in my own life many times. Well, not with me personally but as an observer watching people.

I have seen people who are BEST FRIENDS and supposedly had been best friends for YEARS - oops, chance to make money comes into play and "buh-bye, don't let the door hit you on the arse on your way out the door, but I'm laughing all the way to the bank. Sucka!"

It happened to my friend - her "best friend" of ten years hired her to join her business. Actually when they had the falling out, I thought it was just a personality conflict...but I have since seen this "friend" in action and she is all about filling her own pockets, not giving a $&$# who she steps on in the process.

Be very very careful with people you "know." I'm becoming more cynical as I get older when money is involved. I hate to admit it cause I just had a big to-do over a thread where others were warning me that my fellow agent might have ill intentions. I don't want to believe it - but my gut tells me to be WARY anyway.

And it does make me weary.

Y'know... I agree with Perky that YOU seem to be the one unsure... but on the other hand...

Will you be on title? If someone wants to come along and buy me a bunch of houses and put me on title with no money down... that sounds like a good risk to me! I'd find a way to pay the mortgages if a worst-case scenario arises!

Risk = Reward.

I agree with Jennifer. Get all of the questions out of your system. Pray about it the go for it!

Yes I will be on the title..The reason why im a little on the risky side is because im 21 years old..Im a full time college student, and to be honest with you I make money but how much money can you really make while your in college...This guy is a guy who i trust who i spoke to about houses and he likes the way I think, he believes that im somone in the future he can be partners with, and he looks at me a younger version of him..He want to basically help me out, and get me started with my career in investing..Its just that worse case thats scaring me which is i have to come up with mortgage payments and do everythign on my own cause something happens to him, but as Jenn said risk=reward and thats why im here, so get all my questions out before i proceed with the closing..

Here's my observations based on the others who have answered you: You seem very eager to do this deal, sometimes it seems like you are already sold on it. When others mention you to be cautious, you may feel a little defensive. I'm not here to beat down on your high note because I would give you a standing ovation doing what you are doing at 21. For a 21-year old, you are smart enough to feel that something could go wrong (your title about getting screwed).

I could almost say that when I was 21, the skies seem bright and full of opportunities. I never thought things could go wrong. How could it? And if anyone told me No, I just felt they are just here to beat down on my idea. I would prove them wrong!

If you really want to get your feet wet, even with this guy that you so-called trust, as a compromise, could you start with something smaller? Just be fore-warn, if it is that rosy, it would never come to you (even if you say I'm a skeptic about this)...... Even out of the goodness of his heart to teach you. And he may very well be. I teach people how to invest, I would never get involved but I have a sincere heart of teaching. Maybe my style of educating is different. I never get my money involved.

You know what is too darn funny? I have people calling me on the phone out of the blues asking me to be down-payment partners. I just drop down on the floor and start to roll around laughing till my guts pop out. But the truth was: it wasnt that funny back when I was 21 because I really thought if I dont jump on the opportunity, it will fly away. I'll miss the boat!

By the way, this guy is probably very trust-worthy. But it never hurts to be on the cautious side. And maybe my life experience looking at others have been tainted negatively..... I have seen brothers and sisters harping over parents' money and business - long before their deaths. One black sheep in the family ruins everything. Now, talk about trust. Some people within the family you cant trust, let alone someone whom you met for a few years.

Good luck with your decision. Pray about it. Talk to wise-counsel like you are doing now. Talk to more people, even people who knows him. You could act like a 40 yr old on the cautious side.

You mentioned that you have a contract with this guy. I assume the contract states conditions of the profit split, etc. To be on the safe side, I would find a lawyer and pay him to review the contract. It will only cost you a couple of hundred bucks. Well worth it in my opinion. But then again, it's just my humble opinion. Best of luck to you!

Hmmm flips houses regularly, but needs someone else to finance the transaction? Something smells fishy.
Odds are your friend does not have the credit to swing the purchases himself and most likely little if any real experience in a down turning market. Other wise, why in the world would someone with a great track record want to give away 50% of, by the tone of your post, a sure thing? LOL.

Why doesn't he leverage his own properties?

I wish you well, Eclipsehood! I hope it works out for you, no matter what you do. When I was 21 I was working 50+ hours a week for $6.50 an hour at a supermarket who could replace me >anytime< with someone who would start at 4.75 an hour. I thought I was doing great, and I can't imagine someone coming to me with a deal or a proposition of any kind - so I say kudos to you for trying to do something positive NOW. I never got hold of my dream, for real...until two years ago. Seriously!!

Be careful. Sometimes these guys get all of the money up front so that there is no equity left in the house when you want to sell. Also, if you do actually flip this house, since you will be the owner you are the one who will be stuck with ALL of the taxes when the house sells. So your cut is actually alot less than 50%.

Mephistophele--I believe that the reason he is useing somone like me with a good track record is because he wants to do houses with no money out of pocket..I live in new york and hes knows many realtors who help him flip properties fast even in times like now with a bad market..He does own properties in New york, Penn, and Florida however if he pursues with another loan banks will require him to put a nice down payment on the loan, hes trying to avoid that, and teach me how to do things, with him collecting half and litterly showing me every step of the way...

Perky- Thank You im a very hard worker I go to college full time and im a chef at a restaurant here in new york, my dream is to own restaurant properties sell the restaurant and collect rent from them, and my ultimate goal is to own a shopping center in my near future...I believe doing real estate making money off little houses is just a preview of whats in the future for me..I also believe that this guy enter my life for a reason and I possibly found the key to lead me to my goal...

I no what your saying, and there is a good chance of that happening, however if you were 21 year old and you just made 25k off real estate who cares pay your taxes you left with 17k/18k that you would of never had...and it was a learning experience, and I will work with better deals in the future with more money involved in it...

you can figure about 5% of the price of the home - or more!! for closing costs when you sell.

Its all good I look at this as a learning experience...Let me do several of these then I can do my own stuff...Its just I dont have the knowledge to just go out and buy a house, dont know legal terms ect...This guy is doing it for me...Plus i dont got the cash to dishout to all these initive cost, hes doing thats and for him doing all the work thats where his 50% comes into play..And for me the benefit is im learning and getting closer to my goal

I would read as much as you can from the following sources:
Mortgage Fraud Forum
Mortgage Fraud blog with links to more information
State of NY Pursues Real Estate Fraudsters Pay special attention to paragraph 3.

All were doing is just trying to give you the heads up, if some how you justify this situation to make the move forward, best wishes, lets us know what happpens.

So are you trying to say that somone teaching me how to invest, and as part as our agreement him doing the work, and paying the monthly mortgage, and in return he gets 50% of the profit is mortgage fraud? I read the "State of NY Purseues Real Estate Fraudsters" they basically got screwed cause of there whole scheme that involved appraisal, laywer, brokers, loan officers ect.. but what screwed them more was that they lied about the buyers income, in order to get the no money down loan...The bank didnt even ask for my income they just asked what I do, and where do I work...The loan that im getting I believe is soley based upon my credit which is pretty good

I am just saying to make sure you are fully educated before jumping into this. Make sure the loan application doesn't state an income, just because you didn't tell them doesn't mean they didn't put one down. Could you afford this house based solely on your income? If not I would be surprised that a lender would approve a loan. I would do more research.

Honestly no I cant afford the loan on my income thats why we found a lender that is soley basing this off my credit...However if they do state that im making an income that I could afford the loan what could happen to me? Its not like ill get in trouble, cause I dont know if they put a income down.. as far as I know they didnt....Its not like ill get any jail time for not knowing they lied about my income in order to get a loan....If they are lieing and I found out they are making my income up should I not continue with this deal?

You put your john hancock on something that is fraudulent, whether you "knew" they put it there or not, you are going to be liable! Do not ever sign ANYTHING without fully reading everything. Thrice.

I havent signed anything yet.....Just been trying to get the loan closed..I was told though by the loan officer that this loan is soley based off my credit though...all he did was ask me where I work, and if i have a utility bill...

okay - well, make sure you read everything even if it seems boring and incomprehensible when you get the papers to sign.

I'm just saying I see alot of red flags and to be careful.

Run. Far. Fast.

You are 21 years old. That's too young to do this. If you really want to get involved, spend $500 and a few months and get your real estate agent license. If he's legit, he'll still be there in a few months, right? And you'll know a whole lot more.

If you are serious about this idea, you need to get your personal head together first, or people will use you. As others have said, who pays that mortgage? Who stands to lose, right up to and including lawsuits, bankruptcy, and ruined credit if things go sour? Why... that'd be YOU!

At a bare minimum he'd better be putting a lot down, so that he's in it for real too, and you'd better have a good, tight WRITTEN contract between the two of you laying out the terms of your deal. Run the contract by YOUR OWN lawyer. I mean, you want to run with the big dogs, right? The big dogs take care of business. They use their own lawyer. They go to school and get degrees and licenses. You too can do all those things, and should.

Good luck!

-jeff

I changed mine -not that anyone even noticed when *I* did it, sniff- because ski season was over and suddenly Sno-Boy seemed like I was a cokehead or something. Now I'm Spaceman Spiff. Or Captain Fantastic. Mr. Planetary. Don't mess with me or I'll look at Uranus with my telescope!

Carry on.

-jeff

*snort*

oh, wait, that probably wasn't a good response in light of what you wrote about your previous avatar.

Could you post the contract that you have between each other for us to see? That seems to be the key here, to me. For instance, what does it say in the contract about who pays the mortgage payments and if they are reimbursed out of the sale proceeds for what they paid out. That's really, really important.

-jeff

Another blog about Mortgage Fraud

Jeff I did notice the avatar change just didn't point it out.

This make absolutely no sense what's so ever. A couple of years ago when the market was on fire here we had investors from CA buying 10 in a weekend in their name. 10 houses in one weekend all in their own name. There has to be more to this story and that is why you MUST protect yourself and find out more.

Sniff. SURE you did. You are just saying that. YOU just want to list my $7000 property!

:-)

-jeff (thanks again, by the way!!)

I'd post my real picture if someone tells me how to make a thumbnail the system will accept. What the hell. I'm already using my real name!

The only problem is the reflection off my space helmet... but I can photoshop that out I guess.

-jeff

I can make you a thumbnail. And thats right I am just sweet talking you for your enormous listing.

He wants to do properties with no money out of his pocket

But I thought you said he was paying for all of the costs up front?

Perky:
At this point you should realize that we have been all taken in by Eclipsehood. He got some attention, he left like he was a player making complex decisions and discussing deals, but it was all fantasy.

The contradictions are obvious, don't even bother to call him on them. I saw you sense this in one of your early responses.

Realtyeyes

he is paying for all up front cost, and thats why he is getting paid 50% at the end..Like I said hes really not into this for the money he actualyl really wants to teach me the business cause we are going to be future partners with investing in not just houses but restaurant properties cause im a chef, and other investing ideas....he wants to do no money down loans...I actually just called the bank a few hours ago to confirm that my income is not stated by the loan officer behind my back..They confirmed that all they wanted in order to get my loan done is a place of work, what I do, and a utility bill which I do have cause I rent..They said that it is a loan that is based off income however it is never documented or checked no w2 forms need to be supplied, no tax records ect... so all they really need is a place of work..So I said ok thank you very much, thats all the info I needed...

I still think you should post the text of the contract you two have between you. You do have a written contract with your benefactor, right? Post the text, because it's the key to this whole thing. We are not lawyers here, but we can read through it and I bet be real helpful.

If you DON'T have a written contract, then you are just plain insane. To embark on something like this with a relative stranger on a verbal contract is very poor business and a very poor way to start out your investment career.

So show us the contract and we can pick through it and give you some helpful feedback!

-jeff

we have a verbal gentlemnts agreement...he already put up all cost, we are going to closing within the next week, he already put up alot of the inititive cost...now the only way he can screw me is by not paying the mortgage, which I actually have money to cover..now i can screw him more cause im the one writing out the checks, everything is in my name...Now would you really screw somome (ME) for a couple mortgage payments that is covered cause payments don't start till 2 months after we close the house..So is it worth him screwing me for a couple thousand $$, when his return could be over 20k? If you do what type of a investor are you...I also have all his information down, and is a very close friend of my boss who I known for 7 years..

Well, I guess you are about to find out, huh.

Look, this could be totally legit and he could be everything you say and a box of cookies, but just so you know- this is NOT the way to do business. You need to tighten up your act in the future or you will get screwed, if not this time then next time.

Please keep us all updated, OK? I will be fun to hear about your profits, and I truly hope it goes great for you.

-jeff

Yes well heres the deal jeff, im a young guy oviously im 21...My boss made money with this guy who is his friend and I known my boss for 7 years, and I trust him..and through his restauratn where I work, I met this guy and just recently spoke to him about real estate...My boss showed me prooven profits from this guy well not proven but he owns 3 houses right know with tenants through this guy...I will surely keep this updated, however I am thinking about making a written contract, but in a way i feel that it will offend him, that I dont trust him.. A while ago we talked about a written contract and he said he does it with people he does not trust because everythign is under there name he will do contracts with..People who he trust like me he will not basically because he knows I wont screw him, and He knows i got the cash to pay mortgage payments if he doesnt pay it and tries to screw me..Hes a christian guy so I know hes a good hearted guy, all he talks about is helping people...You know I actually have a good feeling about this and I believe this is something that walked into my life for a reason to start my career in investing I will surely keep you guys updated..Im just waiting to make enough money with this real estate to buy my own foreclosures with a little money down as possible, so then I will not need this guy for all the deals that I do

It is based off of income but it isn't stated? Then what income are they basing it off of? FYI people do go to jail for mortgage fraud if indeed that is what this is. I am not saying it is. I am just saying I would be running for the hills if it was me.

They basically said that its based off you having a income...I mean you cant be a busboy working at tgi fridays and expect to get a mortage of what im getting..i told them I was a chef and they approved of the loan...Im guessing with those type of deals with banks you have to have good credit which I do have

By writing up a contract you show him that you are not an idiot and he will respect you.

Eclipsehood,

We can only all tell you that it stinks to high heaven, from here, so many times. Sounds like it's moving forwards anyway. Saying:

"A while ago we talked about a written contract and he said he does it with people he does not trust because everythign is under there name he will do contracts with..People who he trust like me he will not basically because he knows I wont screw him, and He knows i got the cash to pay mortgage payments if he doesnt pay it and tries to screw me..Hes a christian guy so I know hes a good hearted guy, all he talks about is helping people..."

Just makes me more suspicious. When everyone is trusting everyone else "too much to do a contract", that is baaaaad. I mean... can you really make the mortgage payments for say, 6 months? 12 months? And after you have done that, and it sells, are you getting re-imbursed for what you've spent? Hey, HE spent money too, right? Sorting all this out LATER is not the way to do business- you get it nailed down GOING INTO THE DEAL. Even the two of you scribbling it on a napkin would be far, far better than a verbal contract that you, frankly, don't even seem to know the parameters of clearly.

But I've already said that. Good luck!

-jeff

So jeff basically wat your saying is to just have it written down on a piece of paper, that we both have copies.. stating that he will be paying the mortgage payment, he will put all initial cost to the house, and in the end he will collect 50% of profit..

I'm saying, whatever your deal is, hash it out with him and put it on paper, both of you sign and date it, and both keep a copy.

As far as what should be in the contract, I am not touching that with a 10-foot-pole. That's between you and him and, if you are smart and taking care of business, your lawyer.

You know what this reminds me of? When a young person is desperate to get married because if they don't, they are going to lose the other person. If this guy is for real, he will pat you on the back for talking to a lawyer and running the terms of the deal past him- he'll pat you on the back and compliment you on your business sense.

Just contemplate, for a moment, coming up with almost $3500 a month for the next six months. How is that gonna happen? It will be your legal responsibility for that mortgage payment. Do you make that much in a month even?

-jeff

I would get a good real estate attorney to review all of the documents involved here. One that is representing you and not representing or recommended by your partner in crime. Take the time to do this like the professional you want to be.

Im actually getting a lot of mixed view from everyone here...Some of you are gracing me for my interest at my young age and the step that im doing...Some of you actually like the idea that if someomone where to buy houses no money down under your credit and pay the mortgage you would jump on that...Then some of are you saying thats its good but I should just get a written contract...Overall based on what everyone said its a good situation for somone in my situation however I should get everything on paper that is going to be done through me and him?

You can bet Donald Trump didn't get where he is on trusting verbal agreements.

In real estate, there is no such thing as a verbal agreement.

ok so you agree that is sounds legit, however just get it written down on paper our agreement and terms?

Look ppl cleary he wants to make his mistakes on his own, what's that saying you can lead a pony to water but you can't make that pony drink with a straw? Anyways we've given him plenty of advice. He'll deal with the consiquences himself when he gets there.
Eclipes don't say we didn't say so =P




ps I learn the hard way, Cliff version of my story, I thought I was getting into a partnership owning half of a mortgage brokerage until my verbal agreement shot me in the back, unenforcable....my friend and dear brother in the church that I thought I could trust with my life, screwed me over on just 6k.... when I could have brought in over 20k in profits a month.

Business is business, I learned the hard way, cost me 6 gs but the lesson learned is priceless, I'll never have an agreement without a contract, just standard business practice. If he's offended by a contract then you lose he wins. Just some food for thought.


Lets stop beating a DEAD HORSE PPL!!!!!

[quote=born2sell_81] He'll deal with the consiquences himself when he gets there.

Its nice to see somone has confidence in me lol...Born2sell I know my situation and from what they said I just need to get a written agreement down..If this horse succeeds you will be the first to know

Lets stop beating this horse

btw you must have a messed up family fued/life style going on right know since your bro and friend screwed you...

If you read my other comments it obviously shows that I'm rooting for you, but since your young... I understand the excitement that comes with it and all, trust me everyone wants you to succeed but to be prepared and have all the angles covered b4 hand is all were trying to get you to understand. Again let us know how it goes.

My excitement is not over making 20k...20k is nothing, 20k can be spent on a used car...my excitement is about getting into a business where my goal could be reached..my goal is not to make 20k off flipping a house...My goal is to get into big properties, such as restaurant properties and shopping centers...This is jsut a way for me to learn this business, and establish money to get into those type of deals...and again i will let you know how it goes, every aspect of it...So i can get expert advise on what to do next...

20k is nothing???

Wow. I can't wait for the day that I can say that and mean it.

That said - you get into the big stuff, you better be used to getting everything in writing.

I will not say anything like that. LOL. you get a good real estate lawyer involved and see if he/she says it sounds legit.

If this guy advises you against it, run.

But I think I've abused poor Mr. Ed long enough.

haha yep thanks your help perky and yea 20k is nothing and at 21 years old I mean it...20k can't buy you anything...20k is good off little small deals but when I get older I wanna deal with stuff where im making alot more then that...Im expecting to make over 200k a year when I get older, and I will....

Take investment advice from a real estate attorney??? You are joking right!

The only advice anyone should seek from an attorney is on the legal specifics of the deal. Real Estate Attorneys are not investment advisors.

The number one rule of investing, never take advice from someone that makes less off investments than you do!

I meant for a real estate transaction.

Ditto Perky

To be clear, no, I don't think "we" think it's legit. However, there's a slight chance that it's a great opportunity for you. What *I* am saying is put the terms of the deal on paper, then post those terms here, and then we'll see if it sounds legit. From what you are describing it just sounds wierd, and I don't believe that he's willing to give up half his profits just to be a nice guy. But if he puts it on paper, then maybe I believe it!

I can promise you, that when you sit down to get it all written down, suddenly the deal is not going to stay the same. What your benefactor is willing to put on paper and sign his name to is not gonna be the same stuff he's been saying. It's easy to say anything, but when you are suddenly going to sign your name to a legal document it changes the thinking a little.

-jeff

I'm in the "we" group with Jeff on this one.

Actually I bet he (the benefactor/investor) says something like "if you don't trust me than let's not even do this". I bet putting it on paper is a deal-killer.

-jeff

I just spoke to him recently we are meeting up sometime this week...Everythign that he saids he is going to do we are going to type it up and both have copies..In it, it will basically say that he will put up all initive cost (most is done), He will pay the mortgage untill property is sold, and in the end the profit is split 50/50...

Typed up equals nothing. It needs to be signed and notarized at a minimum.

yes typed up and signed where we both have copies of both our signatures on each typed up sheet..

Why can't a person buy 5 properties in one month in their own name?

I have asked this and I haven't gotten a response. I think this question needs to be answered.

I would never risk my credit for something I was unsure of.

I think there must be a full moon out.

Sorry I missed confused that whole 5 property deal, he just doesnt want to buy 5 property in a month cause banks will require him to put a hefty down payment down becaue they know its a investment property...He tries to avoid that

Just so you know that aside from all the things that are said, when you sign that paperwork you now own that house! If it has foundation issues, you now own those issues. If the city is about to widen the street and lower property values, you now own that loss.

Here's a thought. This is something that has not really been addressed in this thread. Are you represented by a Realtor®? Hook up with a buyer's agent and at least be properly represented in this transaction. They will insure that all the inspections are done (which cost money, BTW) and will let you know if you are paying a fair price for the home. They can pull comps and educate you as to what homes are actually selling for in that area. And the seller pays their commission, so it's free to you.

-jeff

If something happens and you CAN afford the monthly payment while looking to flip or for a tenant then do it. If you CANNOT afford the payment from the get go then don't do it.

I still see red flags waving.

rent is already being paid for its a 2 family house with 2 section 8 tenants...money gets paid 1st of the month..So monthly payments till we flip are no problem to take care of..If they both leave, which they wont but we still have under our contract he pays for the monthly mortgage till we flip...Even with the tennants hes in charge of making the monthly payments...

Eclipse...

I have seen this multiple times. It can be VERY bad for you, think "Big House". Especially if the FBI gets involved, and they like to do just that. I've seen them do it. It's called a "straw buyer" scenario and it is flat out mortgage fraud. Your seasoned investor friend is a bit of a crook. He is using you to deceive the lender. Plus, if he has a written statement with your signature that is HIS PROOF to the feds that YOU KNEW about the scam. Thus you become a WILLING accomplice to a criminal act.

Read below, then RUN!

Straw Buyers

Straw buyers are loan applicants who perpetrators use to obtain home loans, but who usually don't intend to occupy the properties they're buying.

A straw buyer is usually offered a payment, often sever thousand dollars, for the use of their name and credit information to make a "false purchase". A straw buyer may or may not know that their name will be on the mortgage application. Straw buyers are also used to sign documents that contain false information. For example a straw buyer might sign something that states that intend to live in the property when they really have no intention to do so. If a document is signed that states the property is worth a specific amount, but the straw buyer has never seen the property, they are committing fraud. If the lender asks if the down payment came from the straw buyer own funds and he/she answer dishonestly, this too would be fraud. After a straw buyer takes title to the property, the mastermind behind the scheme usually assumes the mortgage and the title to the property. However, a straw buyer may still be responsible for a mortgage even after someone else has assumed it because it was obtained fraudulently.

It is a criminal offense to obtain credit under false pretences. If payments are not made on the mortgage, the lender will foreclose on the property to recover their losses. The straw buyer could be sued for the difference between the amount of money received from the sale of the property and the amount of money owed on the mortgage.

Good luck, and don't compromise your integrity for a quick buck.

Ocracoke what a detailed explanation! That's helps all of us here.

As I said before, nothing that is worthwhile and valuable is going to be free and easy...in the world of real estate and business in general. On a philosophical/spiritual realm, the best things in life are free, but that's not what we're talking about here. This sounds too good to be true..

well, it doesn't sound too good to be true to me, I smell the distinct odor of rat. but hey. what to I know?

How much is the rent? Is it adequate to cover the P&I, taxes, insurance and repairs?

We aren't talking about covering the rent we are talking about mortgage fraud. This goes beyond a bad credit report.

Well heres the deal I dont think im really a victim of a straw buyer...I have seen the house, I am on the mortgage/title/deed..The banks know that I will not be living there...The banks must know because there are 2 family tenants that rent out the house...The banks gave me the loan stricly cause of my credit, they asked where I work and if I generate an income...So them giving me the loan has nothing to do with an exact income that I make....From my understanding and research on a straw buyer, I basically read how that whole scheme works and thats not what im involved in...The investors used several people to buy the same house, raise the appraisal everyone that was buying the house made money, and just sucked out all the equity in the house, that is fraud...They would take out more then what the house is worth that is also fraud, they would lie about the income and provide banks with falsified tax forms that the accountant gave them also fraud...The straw buyer would just be promised money for them using there credit, that is only fraud if all the above were taken place..In my scenerio im on everything I own that house, I will not live in it, 2 families live in it...We will flip the house for what its appraised at probably a little less to get it off my hands quicker, and the house will sell cause its generating cash flow, any real investor would take that house and just wait for the market to get better, and build up a ton of equity on a house thats self efficient...not my case I want to learn how everything works..That what this guy is doing...He is just helping me and showing me the ropes of investing in pre-foreclosed properties, and how everything works form buying it paper work ect.. to maintaining it while we have the property, to selling the property...He also looks at me as a future business partner and that is part of the reason he wants to show me the ropes...

If the home is on the market, then you are not "scooping" it and may in fact be overpaying. If it was such a deal then it wouldn't still be there! The appraised value is pretty meaningless in this context. Why not do as I said and have a REALTOR® do a CMA on it for you? It won't cost you anything. You can use the REALTOR® to represent you in the sale, too.

Unless you just plain know better?

-jeff

Well heres the deal we were lucky to get the info on the house...It was somone who my boss knows that actually couldnt find a 2nd tennant...He want to sell it and thats when I stepped in..I dont believe im overpaying all houses in that area generally go for what I want to sell it for...Im definitely not overpaying its a pre-foreclosed he just wanted to get out of the house...He was losing money..lucky for me though we found another tennant to move in, so he is going to be moving in very soon..I understand that appraisals ar meaningless but the fact that houses in that area sold for what this house is appraised at kinda gives me a good feeling about selling it for its appraisal price..

Just because a house in the area sold for x number of dollars does not mean it's identical twin will sell for the same. It might sell for a lot less. This is why you need an agent.

Im not worried about that...Im worried because all you guys are saying what im doing is mortgage fruad, but again everything that im doing from what banks and lawyers are teling me is legit...however you guys who been in the business for a very long time some of you guys are saying its mortgage fraud, and im young I dont know exactly what it is, but from what I read im not doing any of that stuff, yet you all say that I am

You got me with this one. The purpose of most appraisals is to determine 'market value'. So, 'appraised value' and 'market value' (when the assignment was to estimate market value)are synonymous.

Appraisals are notoriously variable depending on the purpose of the appraisal. You buying an appraisal to get an equity loan? Wow! Look at that! What an optimistic appraisal! Etc.

Plus if it was done 6 months ago it's out of date.

Plus, has our friend seen the appraisal or just heard a number?

-jeff

I have a listing that just had to reduce $35,000. Six months ago they had it appraised for $15,000 MORE than we have it listed for now. It still isn't moving. An old appraisal can be worse than a zestimate. If you bought this house six months ago you would already be in the hole $15,000. Can you afford to lose that much money?

Actually, I am of the understanding that an appraisal is only good (legally) for the day the report was created. So even if its only a week old, it's out of "date". That's what I was told by my teacher in my real estate class.

We had a house listed last year that appraised at over $400,000. The realtor's CMA gave $359K as a good place to start. Seller insisted on $375 because of the appraisal report he had.

since last year the house has switched realtors (we were the second and now someone else has it) and is on the market for under $340K and they even added an extra lot of land to the package. It still is not selling, even though it's a nice house with a lot of room, full finished basement, two car garage, in a scenic location.

Appraiser said it's market value was over $400K, yet here it sits, not even selling for $340.

Hmm.

Eclipsehood... you listening to this?

-jeff

I don’t know anything about this particular appraisal; who knows, values could have declined in that particular neighborhood. One major problem in the appraisal industry right now is pressure from lenders to ‘hit the number’. Unless the appraiser brings in the ‘right’ number (to make the loan), they don’t get any more business from the lender. Colorado just passed legislation in an attempt to stop this practice; other states already have laws in place. Many of the ‘old-timers’ won’t play this game; some new appraisers will play along. It’s pretty sad really. Homeowners hold on to the appraisal like it was gold. The homeowner may have been able to sell for more last year than this year… but they keep holding on.

Eclipse...

You are indeed a potential straw buyer. Go to the FBI website and look under white collar crimes\ mortgage fraud\ equity skimming. What you are doing may not be an exact match, but it is a variation. There are many variations to these crimes, not just one clear cut process that all crooks follow.

Here are just 4 quick “red flags”, I could cite more but why beat a dead horse.

1. Your investor friend is using you to beat the lenders guidelines as far as rate, terms, fees, etc. because he would be charged a higher rate himself (assuming he can even get a loan). That alone in itself constitutes fraud, never mind the flipping, renting, and equity out at closing stuff.

2. You will be pulling cash out for pure profit at closing. Most lenders will NOT allow this. Cash out is almost 100% only allowed for improvements to the property and MUST be documented and inspected BEFORE AND AFTER repairs. Thus, someone WILL BE LYING about the purpose of these funds to someone. This makes me suspicious of the mortgage broker himself. Is he a friend of your investor friend? Are they in each others pockets? Would they even tell you if they were? Keep in mind here that the lender is the one being defrauded, NOT the mortgage broker. The mortgage broker is another third party individual that is susceptible to being bought just like a bad appraiser, bad real estate agent, or a straw buyer.

3. You are getting a loan on credit score alone? Again, 100% of the lenders out there today WILL NOT DO THIS LOAN. Don't believe me? Pick up the phone and call 10 or even a 100 of them and ask. They will laugh you out of town at this suggestion. Even on a stated income loan, they are going to want more financial info on you than just a credit score. Plus they will want to know where the funds are coming from, and if they are a "gift" they will have be what is termed "seasoned". This means the funds have to be in an account under your control for X amount of time before closing, usually several months at a minimum.

4. A bonafied, full time real estate investor is going to have some type of shell company that they use to secure financing. Weather it's an LLC, S Corp, Partnership etc. the "company" will have its own credit line that is used to get mortgages, loans, legal representation, handle operating expenses etc. NOT their friends credit worthiness. Plus, a shell company helps shield you from liability by holding ownership of the properties. What’s not to like or understand about the benefit of this? Why get a mortgage in your PERSONAL name for a business related transaction? I can’t begin to tell you how important this is from a legal standpoint. We live in a very litigious society full of frivolous lawsuits and claims. It’s not fun getting sued. Even when you win the case, it often costs you time and money that you will never fully recover.

I'm sorry, but your guy sounds like a true hack. I've seen hundreds of these people and they always do a disservice to the rest of us who game the system honestly and legally to make money. There are ways to make HUGE amounts of money in real estate, but what you are about to get into is not the way to build a reputation in your community as a professional.

Furthermore, you will never be able to get any type of professional license (real estate, mortgage, appraisal) if you have a conviction on your record related to moral turpitude (look it up). You are young, ambitious, and hungry for the big money. That's great to have that drive. However, if you start out with a felony on your record at 21?

Lenders are watching stuff like this with unbridled enthusiasm. The government is breathing down their necks to tighten lending guidelines through the threat of further regulation almost daily. Thus lenders want to make examples of the people still attempting to game the system. They can and will talk to the feds about you at the slightest suspicion you are up to no good. This is primarily due to the issues experienced recently in the subprime lending arena. You will be drawing a tremendous amount of scrutiny upon yourself by getting into this type of situation. People can and are going to prison for this.

Keep in mind I haven't suggested or pushed you to use any service or particular professional discipline. I stand to make absolutely no financial gain from my advice to you. I'm strictly talking about protecting yourself as a person in the business world. Especially while you are in the learning stages.

You have the information, now it’s up to you to make the choice.

Be careful where you place your trust...

Regards,

Okra

Okra,

If that doesn't convince the lad then he's just too far gone to think... Good job!

-jeff

Jeff I have to agree with you on that one. Great explanation Okra.

Nice username Jeffo. (still feeling guilty for missing the new avatar. )

Ha! What you may not realize, Mona, is that that's no avatar!

Still have that spacesuit around somewhere...

Now about that beguiling smile of yours... what does it MEAN?

-jeff

The investor does not want to be tagged as a dealer by the IRS. That is reason behind the 5 properties per year limit. Anything over that may trigger red flags with the IRS who may take a closer look.

Paul he is saying 5 a month not a year.

I misread that part.

Unfortunately everyone is playing a guessing game.
Without seeing a contract spelling out all the specifics of the deal nobody here can say with any certainty that if it is legal or not nor can they say if the deal if legal is a good deal or a bad deal.

I think we can say if you are lying on a loan application or on the HUD-1 then you are committing fraud. We don't need to see anything to give him that advice. As far as a good deal you would be correct we can't say. That is why if this is not fraud, and I am waving my red flag as I say this, then he needs a reputable agent to represent him.

Thanks Perky, for your extrapolation ... your teacher from your real estate class steered your thinking right: An appraisal is an opinion of value as of a specific date. Since I live in earthquake country, I always tell people what if you do the appraisal today and the big earthquake comes tomorrow.

I think this guy just has stars in his eyes. It may be a good deal, it may not, but like it was said before, we are beating a dead horse. He had his mind set before he came on here, looking for approval rather than rational advice.

Anyways, good luck with it, hopefully it will work out.

Heh I actually found out alot of information today...This loan is a no pre-payment penalty loan, and I am required to stay on the loan for 60 days...I have the right to sell the house at anytime after the 60 days...The house is 2 family house...my mortgage is going to be $3880...There is 1 section 8 in there know paying $1925, we have another section 8 lined up to move in as soon as we close, so rent is goign to be coverered...So what we have here is a non-owner occupied property..Im still debating if I should move in I just need to friends to move in..In any event, I found out if everythign went legit on the loan application they said everything went fine, A income is stated, but there is no tax forms to document it, and at the closing no tax forms will need to be signed...So getting the loan was not obtained in a fraudalent matter...

What amount is the income? If it exactly what you make fine. If it not then it is fraud. Since you have already stated you could not afford this house on your income then we have to assume that the amount listed does not accurately reflect your income. That would be fraud.

This whole thread is weird and is like a bad plot which thickens with bad vibes. The original poster is really not intimidated with the twists and turns of this purchase transaction where he/she is being used and abused as a straw buyer, because he/she would have seeked legal advice before continuing on based on the professional opinions provided here. Then, again, it could be all just a joke.

I'm not going to comment on the mortgage fraud issue, because I'm sure many others will comment on it, and you are ignoring everyone's opinions anyhow.

I still question whether it's a good deal. The $3880 probably doesn't include taxes and insurance. Where I live the taxes are about 2% which would be another $1,000/month. Insurance could be $500/month, which would put you in a negative cash flow of $1500/month, not counting any operating expenses or repairs.

You should get both of these amounts before proceeding. In may places the property is reassessed when it is sold, so if the current taxes are low don't use that figure, use what they will be after the reassesement.

Since your exit strategy is to sell it to an investor that might be hard to do with a negative $1500/month cash flow.

the amount on the income is 6k a month......Now in reality I dont make 6k a month however...With the income generating from the tennants thats 4k, and I make $2100 a month after taxes so in reality its like I make an income of $6100..That doesnt even matter, they said at the closing which is tomorrow there is no tax forms that need to be filled out stating that I make that 6k..All they need to know is that I have a job and a income

bstout $3880 includes taxes...homeowners insurance is all paid for it was $1100

So you plan to lie about your income? That is fraud. We need a lender to weigh in here. But it is my understanding that they figure the rental amount separately they don't expect you to have included it in your income. You don't have an income of $6,000 you have an income of $2100. That is the income you need to be stating. If they the lender want to factor the rental income in to your ability to get this loan they will do so. You are fraudulently misrepresenting your income. I can stand here and say FRAUD FRAUD FRAUD till I am blue in the face and you just are going to spin this to make you feel comfortable going forward.

yea but heres the thing at the closing if they dont require any tax stubs or anything to proove my income it doesnt matter, and the bank doesnt care...If this was a loan where I needed proof of my income I guarentee you my intrest would be alot less then what its at..

Was the income you "stated" actually what you make or did you make up a number to support the payment?

Its not what I stated its what the loan officer stated...and its what the banks told me when I called...They said that there is no other information I need to support that income that the loan officer stated...He said this loan is all based off your credit

Has this loan officer been recommended by your friend?

Lenders Verify the Source of Stated Income
While lenders don’t check income on a stated income loan, they do check the source of the income. Ordinarily, they require that a self-employed borrower be self-employed in the same business for two years, and that a salaried employee be employed in the same line of work for two years.

The income stated by the applicant is not verified, but it must be roughly consistent with incomes earned in the type of business or line of work in which the applicant is involved. Where the range of incomes is very large and the applicant comes in at the top of the range, the underwriter might ask the applicant to strengthen the application by showing significant financial assets.

You are palying a word game with this. What income did the loan officer put down on the app to submit to the underwriter. Somewhere during this process you are goint to have to sign the 1003 stating that the information on the form is correct. Your "stated" income will be listed on this form and if you sign it you are committing loan fraud if the stated income is not what you make either by salary, commissions or investment income.

Stated income loans based on credit means only that the lender is not requiring you to produce the documentation to get the loan and you are paying a higher interest rate from this priviledge. You will also sign a 4506 ot 4506-T form allowing the lender to request several years of your tax returns to verify the stated income.

What you appear to not want to see is that you actually have to make the amount on the atated income form.

Stated Income Loan: Great Rates on Stated Income Home Mortgage Loans
Stated Income mortgage loans are for those who actually make more money than they can prove with traditional mortgage documentation. They do not require pay stubs, W-2's or tax returns and they do not require verification of your income. Most of our programs also do not require that you sign a 4506, 4506T or 8821.
Typically a borrower in one of the following situations is a good candidate for a stated income loan:

Someone who is self-employed and has a lot of tax deductions and as a result cannot "show" enough income to qualify for a traditional mortgage.
Someone paid strictly on commission.
Someone with a base salary who also earns commission or bonus income.
Someone with a second job or other household income in a field where they have the ability to make good additional income.
Someone with a lot of tax deductions whose taxable income is reduced below what they would need to qualify for a traditional mortgage loan.

What is a 4506, 4506T or 8821?

A 4506, 4506T and 8821 are all IRS forms that mortgage lenders use to pull a copy of your tax returns. They are used for fraud prevention on full doc and reduced documentation loans (stated income, no ratio, no income, no asset, etc.). Most brokers and lenders will have you sign one at either application or closing. It is rare that they are used unless an underwriter suspects fraud, and it is more rare that they might be used in a random audit after closing, but it can happen.

Essentially they serve as a means to keep people honest when they are applying for a stated income mortgage. Most of our stated income loans do not require the use of these forms and none of our no doc loans require them.

I think that if you make $2100 and you claim $6000 that is going to raise a few eyebrows. How many people who do your job make $6000? Again you are committing mortgage fraud by misstating your income.

So who is this lender that you are doing these cut and paste jobs from their website or an e-mail?

Paul I have been wondering the same thing.

Eclipse,

I don't know why people are still trying to help you since you have an excuse for every bit of advice that has been given to you. I think it is about time we change the topic and give you some very good advice since you are now comitting mortgage fraud. I will start the advice you will need very much. I am only offering this advice because I care.

HOW TO SURVIVE PRISON.

1)Do not cry, show fear, or a vulnerability publicly. Doing so will quickly make you a target for other prisoners.

2)Learn to play spades, pinochle, chess, or basketball as it makes the time go by faster.

3)Get a prison job which will keep you occupied as the days pass by.

4)Read a lot. They have a library there so use it. Catch up on your reading. Consider taking correspondence courses and continuing your education. Consider writing as well. Letters to friends and family, fictional short-stories, and poetry can make time pass a bit faster.

5)Work out. It will make the time go by faster, and is an outlet for stress. In addition, physically fit people are less likely to be targeted as victims for strong-arm tactics.

6)Brace yourself for the social dynamics of prison. There are certain ways to behave towards others if you want to get by:

6a) Do not become a 'punk' (girlfriend). While becoming a punk might give you some fleeting, temporary protection from other inmates, you will be a virtual slave to one. Punks are used and abused. They are traded away in card games and sold for cigarettes. It is not a path to long term survival in prison.

6b)Do not snitch. If you see something illegal or violent, walk away and do not divulge any information if questioned later. Being known as a snitch will make bad things happen to you. (Of course, you have to decide whether your fellow inmates or the authorities are more dangerous. If you're questioned and lie to the jailkeepers, you can get in serious legal trouble.)

6c)Stick up for yourself or you will be turned into a punk. It's better to get into a fight and lose than to be seen cowering or placating. Your reputation is more important than your desire to avoid pain, so guard it with your life. Ultimately you should avoid any confrontation if you can, but if you can't avoid one, react quickly and with aggression. So swing first. If you happen to get beat down never call for the correctional officers--I repeat, never. Doing so will get you labeled a punk.

7)Beware of rape. You are more likely to be raped if you have been confined for sexual offenses, especially against juveniles, show any weakness or are even shy, have any feminine characteristics or are younger. Keep quiet about your offence and if you were convicted of a sex crime you will need to go into protective custody, grow a beard and cut that long hair.

8)Keep to yourself, keep your mouth shut and do not tell anyone about your personal life, family, or criminal history--keep them wondering, but don't overdo it. Do not discuss politics or personal feelings about anyone. In other words, don't put your business out on the street. At the same time, don't get involved in other inmate's business.

9)Become religious. Inmates tend to treat those always carrying a Holy Book and praying with more respect than others. In addition, many people find a church and belief in a higher power protective and supporting.(In some cases this isn't recomended, use your own judgement if in this situation)

10)Recognize that nights are the worst. You will miss your family, and freedom. You will probably cry, so stifle it into your pillow so no one will hear.

Disclaimer: I have never been in prison nor have I worked in a prison. I do not declare this information as accurate and can not truthfully state that by following the above will guarantee your safety. I do declare that being someone's biotch in prison is no fun however I have no knowledge or experience in prison biotches.

Kep I couldn't have said that better! I won't dilute it by adding anything. But I do say I am worried about your insight
Changed my mind I am adding this link: Survive Jail Though I must say Kep's is funnier.

LOL

Stated income loans are what brought the mortgage industry down. The problem has *not* been with no doc loans in which the borrower produces zero documentation of income & the lender knowingly accepts that risk in exchange for a higher rate, those tend to be FICO driven.

There are very few programs left for financing anything over 80% by way of stated unless the borrower has pretty good credit.
And those files will get a thorough review in UW as will the appraisal.

And absolutely we will see borrwers being prosecuted for mortgage fraud as the subprime mess winds out. Since the govt & media are so eager to crucify all mortgage brokers as predators, I fully expect to see some borrowers who fudged on their loan apps doing some time.

Legitimate borrowers can produce bank statements if they don't have W2's.


I haven't been following this thread closely b/c it was clear early on that this guy does not want to hear what yall are saying but I did want to mention the stated income problem.

Secret, I figured why give advice he won't take so I Googled "How to survive prison" for advice he could really use but my disclaimer is original!

I just did a research and found information...The part that I do not understand is the fact that im not getting a full doc loan, im getting a stated income loan where the lender does not check or verify your income. They just verify your employed..How does that justify fruad on my behalf if the banks arent doing their job and making sure im really making 6k a month before they give me the loan??

How is it fraud? You are stating something that is not true!!!

Or is it only a lie if you get caught?

Well I have to say I think I like your term of prison [censored] over punk. And I do have to say you have some very valid suggestions in your list as well as your reason for giving him some advice that he might not want to hear but will come in handy in the future.

Should we point out that employment applications ask if you have had a felony conviction? Some say in the last 10 years and some just say ever. Does make it hard to get a job. Being so young and unable to find work. It's really so sad.

Now I know Kep and sound like we are being flip with you but the points are very serious.

You are committing FRAUD! Just because I don't ask you if you killed someone does that make it OK to go and do so? Geez go read a Bible or talk to Buddhist Nun or any religious person of your choice. Ask them if it is OK to lie if they don't bother to check it out.
Yes I just lost my composure on this one.

Secret_Agent: Did you hear a "mooo"?

LOL Thanks Perky I need that. This can turn into a cattle yard at this point and he isn't going to get it.

You know really I have about 5 Moo's running around right now. Focus.

I had a housemate once who stole money from my room. When confronted, his defense was that I didn’t lock my room. I guess that made me a ‘fair’ target. It sounds a little like what is going on here.

Actually they *do* check things on a stated loan. As has already been posted the income claimed has to make sense for the job, there are stats on this easily available to UW. The whole picture has to make sense. And they will indeed verify that the borrower does indeed work where he claims to work they just won't require W2's or paystubs.

I'm not sure why this guy is hanging around here. I'm only adding my 0.02 b/c someone else may be reading who isn't sociopathic enough to blame the victim & think that is a legitimate defense.


These days the loan originator can be a real sleaze but the loan has to go to an underwriter at some point & the overwhelming majority are on full tactical alert for any hint of misrepresentation, most especially on stateds.

What ever happened to this guy? Do I need to bring him some socks and cigarettes?

That is the frustrating thing about somebody like that... they vanish! Anybody get his real email address?

-jeff