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#414567 - 10/19/12 04:16 PM False Bank Statement
koma12 Offline
Junior Member

Registered: 10/19/12
Posts: 3
Loc: Maryland
I am representing a buyer who put in a all cash offer for a rental property with a doctored bank statement.
She put in a all cash offer for a condo and gave me a statement to prove she has the funds. The offer has not been accepted yet but it has good chance to get accepted. I found out as she accidently gave correct statement with other paperwork when I visited her to pick up the deposit check and other paperwork. When confronted, she said she has the funds and not to worry as she will go through with the transaction if approved. She is just going to get her investors to chip in. She is active and has presently over 8 properties she has bought with others.

What should I do?

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#414569 - 10/19/12 04:43 PM Re: False Bank Statement [Re: koma12]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7950
Loc: Vermont's North-East Kingdom
Ignorance is was bliss; wasn't it ?

I'd share this new knowledge with your Broker . . . . share the wealth !

What would your Real Estate Commission suggest you do . . . . put your head in the sand ?
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#414571 - 10/19/12 05:17 PM Re: False Bank Statement [Re: koma12]
DueDiligence Offline
Major Contributor

Registered: 12/05/06
Posts: 1635
Loc: Wild Wild West
Despite the buyer says she'll pull the money together in time to fund at closing, she actually doesn't have the money right now and is making a deceptive/misleading offer. Through you, and you know it.

Your Purchase Contract may include verbiage regarding buyer warranties such as, the buyer warrants that s/he has disclosed to the seller any conditions that may prevent him/her from being able to complete the deal. At this time, such a condition exists. So, in addition to your knowledge of a false POF, you also (if your PC has that clause) know that the buyer misled there, too.

You may want to point that out to your buyer in conjunction with telling the buyer that you cannot participate in a misleading offer, which you cannot.

So how do you try to save the deal and CYA? You should convince the buyer to amend her offer with the REAL POF. As an "olive branch" to the seller for this enthusiastic "oversight" on the part of your buyer (and if your buyer feels strongly that she can pull the money together), you could offer that verifiable POF will be submitted within 7-10 days after acceptance, OR the EMD shall be non-refundable and the deal dead. If the buyer wanted to stay in the deal after the first EMD goes to seller, at that time she will need to deposit add'l funds, which again, within a set time period shall become non-refundable if POF isn't submitted.

With the above strategy, you will accomplish one of two things: You'll extricate yourself from a real problem AND keep the deal together; or, you'll flush out your buyer and extricate yourself from the problem.

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#414576 - 10/19/12 07:48 PM Re: False Bank Statement [Re: koma12]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7950
Loc: Vermont's North-East Kingdom
Don't most Loan Applications have a little clause down at the bottom in the area where one signs saying something to the effect that "this application is being submitted as a truthful and complete statement, evidenced by my signature, under penalties of perjury" ?

Perjury is a felony.

Attempting to get a Bank to loan money under false pretenses, is tantamount to committing a fraud . . . . Bank Fraud. Some might say that knowingly participating in the activity, for your own material gain, is like "conspiring to commit Bank Fraud".

I'm not saying that . . . . I'm just saying "some might say" . . . . you take it from there.
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#414607 - 10/20/12 04:36 AM Re: False Bank Statement [Re: Vermont]
DueDiligence Offline
Major Contributor

Registered: 12/05/06
Posts: 1635
Loc: Wild Wild West
My understanding is that the buyer was making a cash offer to a seller, not obtaining a loan.

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#414619 - 10/20/12 11:56 AM Re: False Bank Statement [Re: koma12]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7950
Loc: Vermont's North-East Kingdom
I was thrown off by the terminolgy "Bank Statement" and probably started thinking in terms of "Bank Application" . . . . that's different !
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#414646 - 10/20/12 09:42 PM Re: False Bank Statement [Re: koma12]
koma12 Offline
Junior Member

Registered: 10/19/12
Posts: 3
Loc: Maryland
Alright, this is where we are. I met her again today afternoon and she had a guy with him who logged onto into a bank in front of me to show the funds. He said he will be investor with her and obviously has the funds. They will from a LLC together and go through. Not to worry was said and she said she has done this many times. Essentially she look for rental properties and then gets investors in as the deal is about to close. Look like she has very good relations in her well funded community.
Since their is no bank loans the perjury is not an issue. I spoke with another very close friend and she is also conflicted about what to do. I have the duty to tell the seller agent but ....

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#414648 - 10/20/12 11:06 PM Re: False Bank Statement [Re: koma12]
Artiste Offline
Major Contributor

Registered: 06/12/06
Posts: 2372
Loc: Arizona Bay
If her check clears and the money is deposited with the seller through escrow, then that's the deal.

Bank account balances can be fudged, so they're not to be relied on because you can "deposit a check" in your account and it will show on your statement until the "mistake" is corrected.
_________________________
Let's take back the real estate between our ears and get green like a sonofa$%^&*

NAFTA is over!!
(if you want it)


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#414658 - 10/21/12 04:53 AM Re: False Bank Statement [Re: koma12]
JasonMb Offline
Junior Member

Registered: 10/20/12
Posts: 9
Loc: Myrtle Beach, SC
Maybe you should ask the investor to sign the contract also? Shouldn't be a problem if they are really putting in the money?

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#414667 - 10/21/12 04:25 PM Re: False Bank Statement [Re: koma12]
DueDiligence Offline
Major Contributor

Registered: 12/05/06
Posts: 1635
Loc: Wild Wild West
Originally Posted By: koma12
Alright, this is where we are. I met her again today afternoon and she had a guy with him who logged onto into a bank in front of me to show the funds. He said he will be investor with her and obviously has the funds. They will from a LLC together and go through. Not to worry was said and she said she has done this many times. Essentially she look for rental properties and then gets investors in as the deal is about to close. Look like she has very good relations in her well funded community.
Since their is no bank loans the perjury is not an issue. I spoke with another very close friend and she is also conflicted about what to do. I have the duty to tell the seller agent but ....


So, now 1) You know she falsified a bank statement. 2) She takes you to meet a "guy" (who you do not know) who sticks a card into an ATM slot and shows you an account balance and claims that he will possibly be a party LATER MAYBE. 3) The "guy" isn't a part of the transaction. So, your buyer does not have the cash to make a cash offer and you absolutely positively know this.

Are you afraid to share all this with the selling agent? And, if so, why? I mean, if it all looks good to YOU, why shouldn't it look good to the selling agent? Tell the selling agent the buyer falsified a bank statement (was it even HER bank statement?), how impressed you were meeting some "guy" at an ATM-- how wonderfully connected your buyer is to her "well funded community"-- and what exactly does that mean? A gang of some kind? But go ahead, tell the selling agent all this and see if s/he and the seller think there's nothing wrong with this deal.

Why was proof of funds required with an offer?

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#414669 - 10/21/12 05:54 PM Re: False Bank Statement [Re: koma12]
KT Offline
Major Contributor

Registered: 01/18/05
Posts: 1581
Loc: Ohio
I agree with what Due says.

Also, this dude, if he isn't on the PA now, shouldn't he be? Or as the LLC? And how quickly can an LLC be formed? Not only the closing company, but also for your/your broker's records, should have/need/keep any LLC docs.

Most people or entities want to know exactly who they're selling to, and usually where all the money is coming from, up front, not half through a transaction.

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#414689 - 10/22/12 04:31 AM Re: False Bank Statement [Re: KT]
Dodger52 Offline
Member

Registered: 10/14/11
Posts: 266
Loc: Montana
#1 discuss this with your broker immediately, You are not the only one that will lose your license when this goes bad. Falsifying POF, whether to a bank or to a seller is fraud. Although you had nothing to do with creating this false document, you are aware that it is false.

#2 You have an obligation to disclose this to the seller, and that doesn't mean you "should", it means you have to.

#3 this is NOT how "well funded" people buy properties, this is how con artists try to buy property.

You are in a tough spot, but its not because what you should do is unclear. You are in a tough spot because if you do what you are licensed and have sworn to do, you will not get paid, and you will not be able to do business with this "investor".

This buyer and others like them may get away with this type of thing a couple of times, but eventually the house of cards will fall, and when it does they will take you down with them.

But before you do anything talk to your broker.
_________________________
Dodger52 (Chris)
Prudential Montana Real Estate
www.MT-RE.net
www.facebook.com/MissionValleyMTHomes

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#414695 - 10/22/12 03:06 PM Re: False Bank Statement [Re: Dodger52]
SoFLBroker Offline
Member

Registered: 04/20/07
Posts: 174
Loc: Florida, Treasure Coast
1. Advise your broker.
2. Advise the seller's agent
3. Hustle your behind off to find a new and better buyer, this deal may become a headache.
_________________________
Selling Foreclosures from the Treasure Coast to the Palm Beaches!


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#414702 - 10/22/12 06:32 PM Re: False Bank Statement [Re: koma12]
Artiste Offline
Major Contributor

Registered: 06/12/06
Posts: 2372
Loc: Arizona Bay
Maybe her rich uncle is going to walk into the escrow office one hour after they have an accepted offer and give them cash money.

Maybe her rich uncle is out earning the money or is using it for other purposes and when his niece finally finds a property and they're in contract, he pulls the trigger and the funds are available. But he doesn't want to mess with it until the time is right.

You don't know.

You don't know if loans are going to fund either. Lots of promised loans don't happen.
_________________________
Let's take back the real estate between our ears and get green like a sonofa$%^&*

NAFTA is over!!
(if you want it)


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#414726 - 10/23/12 03:36 AM Re: False Bank Statement [Re: Artiste]
koma12 Offline
Junior Member

Registered: 10/19/12
Posts: 3
Loc: Maryland
Artiste,
You see my frame of mind. This woman finds deals and then gets some investor to come along. The investors don't commit upfront, but come along when the deal is on the table. She is sitting on 8+ rentals this way, all were paid cash - this was confirmed by me asking around.
I was not taken to an ATM but an online account was accessed in front of me to sooth my nerves. Some might say that even that was a scam, and you might be right. But, I am gonna keep quiet and wait for another few days as it will be decided by then!
LLCs take all of 48 hours to form.

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