I think a lot of people don't realize that loan fraud is a federal offense. Don't write anything on your application that isn't true. Don't exaggerate your income, don't lie about occupancy, don't lie about anything when applying for a loan. The chances of you getting caught are very small but the penalty is prison time. So not worth it.

http://www.hudoig.gov/sites/default/files/documents/2014-CF-1801.pdf @John Rooster First case I saw.

You don't know the buyer is even getting a loan. The buyer may be paying cash. You are conflating The Bank selling the property with a hypothetical insured lender which doesn't exist. Point missed

John, read what it says, loan OR transaction, deceiving OR providing false information, breaking it down further; false information in a transaction with the insured lender as the seller, = fraud. If you conduct any business of any kind with a bank don't be pulling anything based on or using any misleading information, verbal, written or by implication. The size or scope of the sneaky transaction is irrelevant, anything that is done that does or even could cause a loss is punishable as a felony. If everyone cheated a bank out of $100 it threatens the banking system and federal insurance claims. If you are dealing with a bank you better be shooting straight, they clearly have the upper hand from a legal aspect. The same is true with HUD as well as Mark pointed out. There are many issues where you may think you have to be proven guilty of a crime, this is one area where you can simply be accused of a crime, the act or attempt itself is a crime, and you'll be defending against the accusation that you attempted to do something, you'll likely lose. I have no idea how many people thought they could pull one over on a bank and ended up in prison, but I know there are such people in prison. They all thought they were smarter than they were. :)

That isn't a court case. Try better

It is called Mortgage Fraud and there is no way around it. On Fed properties Wait till Owner Investor period ends, see if property is still available, make credible offer, probably all cash.

Doesn't matter what the law is. Lying to the an insured lender is the same as lying to the feds.....which makes it a federal crime. How hard is that to understand? Intent to deceive and defraud are not that hard to prove, especially when the intent was to deceive or defraud.

The person listed in that case ended up paying a penalty to get off. It seems that some people will still try to violate the law if they deem the gain is more than the penalty if caught. This reminds me of the oil spills and illegal dumping in the ocean when I was a kid. These oil companies might save 100 million dumping but only pay 10 million in fines at the time. So by their standards they were profiting 90 million. It wasn't until the fines were raised so high that most didn't even think about doing it as perceived gain was outweighed by the risk. I believe most honest people would not want to violate laws for financial gain.

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Spencer SimonPoster

Real Estate Investor
Rougemont, NC

Buying & Selling Real Estate

How does one circumvent an owner occupied clause on REO's

Spencer SimonPoster

Real Estate Investor
Rougemont, NC

Posted March 23, 2014 11:10

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Account Closed

Investor
Central Valley, CA

Account Closed

Investor
Central Valley, CA

Replied March 23, 2014 11:20

Sometimes I wonder if posts like these are plants by DAs or AGs. But to give them credit, I think their posts would be more creative and comprehensive.

Don't circumvent an owner occupant clause. Done.

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