Originally posted by @John Jackson :

Thank you for your question, Russell.  I was in the middle of legitimately acquiring the mortgage note for the Massachusetts property, already in foreclosure, when a combination of this person, the sellers, the seller's mortagee, the seller's real estate agent, and the buyer's real estate agent, convinced the note holder to back out of his sale to me.  They then orchestrated a sale of the property to the buyer I'm investigating.  The mortgage the buyer received for the home was arguably fraudulent.  The home had extensive physical deficiencies like no running water, and padlocked rooms with floor joists structurally unable to be walked on.  Yet the realtor conducted a regular sale of the property, and the buyer received a conforming mortgage.  So, along with trying to determine if the buyer himself committed wrongdoing in appying for the mortgage he received, it already appears obvious that somehow the banks appraisal process must have been monkeyed with in order to result in the bank giving the buyer an ordinary mortgage for the purchase.  I'm determined to uncover every bit of wrongdoing that took place and bring all available evidence for it to all possibly relevant authorities.

 Sorry to hear that, but your energy can be used in a positive form. This will eat your soul alive. Its real estate, we have to move on. learn from it and dont let it happen again. 

@JD Martin All I'm interested in pursuing is any wrongdoing, if provable, and if correcting it would reverse the sale.  If I were to find those conditions, I'd have no problem choosing to act on them.  If I don't find those things, because they don't exist, that would be sensible point to go with the 'better luck next time, we've all been screwed too' balm.

@John Jackson If they clearly had no intentions of continuing to live in the DC home, and it would appear that was the case, then that was mortgage fraud. There is no fraud on the Massachusetts home since it is truly their primary residence.

Originally posted by @John Jackson :

@JD Martin All I'm interested in pursuing is any wrongdoing, if provable, and if correcting it would reverse the sale.  If I were to find those conditions, I'd have no problem choosing to act on them.  If I don't find those things, because they don't exist, that would be sensible point to go with the 'better luck next time, we've all been screwed too' balm.

 OK. Good luck to you. 

You do realize that even if you handed over the evidence and somehow got charges brought forth... they could just issue fines? Fines, prison are going to happen well before they undo the sale.

Unless you get someone powerful people on your side like this the sale isn't going to be undone.

https://sf.curbed.com/2017/11/29/16715078/presidio-terrace-sale-overturned-supervisors-rich-residents

@Mike D'Arrigo Thank you.  That's what I was thinking too.  But I don't have any experience or training to know.  I appreciate your help :)

@JD Martin   @Russell Brazil   this is just someone who has no clue as to what the legal process's are and what it cost.

and to get a court ( and only a court ) can reverse a sale would cost probably as much in attornies fee's as the equity is worth if not more.. better to donate that time and money to a worthy charity..

@Russell Brazil @JD Martin   plus no attorneys fee provisions.

I wasn’t trying to blame you. I was trying to explain the other sides point of view. And that even if you are right you still (probably) don’t win.

I’m definitely trying to keep you from tilting at windmills though. Deals fall through all the time and at the last minute. Sometimes it’s shady business. If you are going to take that personally I think you need to adjust your model or avoid real estate altogether.

@Jay Hinrichs Yes, that's the problem.  Ordinary people would like to believe that the rules, regulations, laws, are simply that, and people are expected to abide by them.  And if they don't, then people can expect to be held accountable for that, at the very least if someone wants to make the effort to do so.  I understand that reality has become that rules and laws are only tools used by some who have enough wealth and power to wield them.  Well, I can't change that on the fly.  Or ever, probably.  But that doesn't mean I'm going to sit around and just take it on the chin and keep my mouth shut about it.  If there's anything I can do through honest, hard work to try and fight for my interests, and my interests are valuable, not just argument for the sake or argument, then I'll fight that fight.

Originally posted by @Jay Hinrichs :

@JD Martin   @Russell Brazil   this is just someone who has no clue as to what the legal process's are and what it cost.

and to get a court ( and only a court ) can reverse a sale would cost probably as much in attornies fee's as the equity is worth if not more.. better to donate that time and money to a worthy charity..

 He just needs a nice senator neighbor to write little letter for him and all is well in the world.

Originally posted by @John Jackson :

@Jay Hinrichs Yes, that's the problem.  Ordinary people would like to believe that the rules, regulations, laws, are simply that, and people are expected to abide by them.  And if they don't, then people can expect to be held accountable for that, at the very least if someone wants to make the effort to do so.  I understand that reality has become that rules and laws are only tools used by some who have enough wealth and power to wield them.  Well, I can't change that on the fly.  Or ever, probably.  But that doesn't mean I'm going to sit around and just take it on the chin and keep my mouth shut about it.  If there's anything I can do through honest, hard work to try and fight for my interests, and my interests are valuable, not just argument for the sake or argument, then I'll fight that fight.

 Make sure your fight advances your interests.... as in finding a new deal to "replace" whatever was lost in this deal. Don't tie up your resources and time in something that won't further your interests... I guess unless your interests are making a point and exposing the (small time) wrong doing. 

Originally posted by @John Jackson :

@Mike D'Arrigo Thank you.  That's what I was thinking too.  But I don't have any experience or training to know.  I appreciate your help :)

 Having said that, it would be prohibitively expensive to pursue legal action with no guarantee that you would prevail. Personally, I think it would be just a drain of energy that can be put to better uses.

@Matt K. My only interests are determining if there was any wrongdoing in this deal or by the people in it that looked like it was enough to provide an opportunity to reverse it in some way.  If any other property ever comes along that would be an acceptable alternative, I'd be prepared to stop and consider whether or not I wanted to keep fighting for what I wanted, or drop it and go in the new direction.  Seems simple.

This is a lengthy one.  

But I'm not sure why you would think there would be an issue with the second loan. The first loan refi was the one that might be questionable because it sounds like they had technically moved to another state and then went and refi'd their loan and claimed it was their primary residence when it may in fact not have been.

As for the second loan, though, that scenario happens all the time. In fact, Brandon from BP is one of the biggest proponents of that exact strategy.

Its what he refers to as House Hacking.

You buy your first home as a primary residence. As a loan on your primary residence you can get loans at a much better rate and with a lot less money down. 

You live in it for 6 mos or a year and then find your next deal and buy that as your primary residence and you move in there. You then rent out your first house.  When you rent out that first home, you do not have to re-do your loan. 

So what this person did by buying the second house and getting a loan as their primary residence is perfectly legal. They were living in the area and could justify the intent that they would be moving in when they were buying it.

So the second loan is perfectly valid.

The refi loan is the one that could be questioned. But are you sure you have all the facts? Did the owner start the refi while they were still in the first town? Did the owner have a residence in the new town yet (i.e. renting?) when they did the refi?

If they've defaulted on that first loan, I could see the bank considering pursuing something if they find out the person lied on the application by not checking the box that it was not their primary residence. Aside from that, I don't see the bank caring. Not worth going after the borrower if they're making the payments.

John  its America anyone can go on line on Social scamming media  file complaints hire lawyers file lawsuits you can do it all.

I think feed back your getting is that even though all these avenues are open to you.. the end result will be nothing but a lot of your time .. and depending on your personality stress.... especially if your attorney wants a 10k retainer and starts billing you then 3 years from now your into the deal 50k and lose. 

One show I think you may want to watch is American greed.  you will see those that get in Major trouble have big big frauds going on for many years a lot of complaints etc etc..

so I guess to use this phrase  Knock yourself out    but don't be surprised if nothing happens.. but you never know.. you can try all the free avenues..

however a Recession of a real estate transaction that has title insurance most likely and lenders etc. would be EXTREMELY expensive and even at that the authorities are not going to say you need to unwind it worse they would do is make them pay off the loan...

@Russell Brazil   I think we talked about this but in all my years of doing this and its a bunch 4 decades I have had ONE specific performance suit and I won it.. took almost 3 years.. I had to put the entire purchase price up in CASH into the escrow and let it sit there the whole time spent 20k in legal fees and then finally prevailed.. the seller still would not deed to me so the title company gave me title insurance based on a court order.. its the first time I had been involved with the transfer of title that did not include some sort of deed.. IE trustee Deed.. warranty deed quit claim  Tax collector  Sherriff  Timber deed you name it..  So people can take the pot shots but they got to be ready to perform and go the long haul.

Originally posted by @John Jackson :

@Matt K. My only interests are determining if there was any wrongdoing in this deal or by the people in it that looked like it was enough to provide an opportunity to reverse it in some way.  If any other property ever comes along that would be an acceptable alternative, I'd be prepared to stop and consider whether or not I wanted to keep fighting for what I wanted, or drop it and go in the new direction.  Seems simple.

 Why does the sale get reversed, why can't the "guilty" party just pay a fine and move on? And at least be real with yourself... your own words

This is about a property I came upon and concluded I wanted to invest my family's future in, for a variety of reasons.

John Last comment.. since your not a party to the loan docs @Chris Mason   the only documents you can get are ones that are public record the bank won't talk to you.. you would have to use get an order form the court to get a bank to release docs  so no way your going to dig into this without money.

Other than aforementioned complaints to regulators and see where that goes.. which I suspect will be no where.

@Mike H. Thanks Mike.  Yes, I have this person's own, public words, multiple examples, telling of the move out of DC, in advance, and then of the move here to Massachusetts.  The refi of the DC home was a month after the move to Massachusetts, into a rented duplex, had taken place.

It seems like a lot of time, energy, and effort is being wasted on a deal that didn't go through when you could put all of that time, energy, and effort into a deal that *does* go through. One of the first rules in REI is to not take things so personally. Sometimes you could get all the way to the day of closing and things fall through; it's life.

I am also unsure about the refi, but it clearly went through and if it's being paid, I don't see the lender bothering with it. Finally, as perfectly explained by @Mike H. , one can quite easily and legally have more than one primary residence loan. 

@John Jackson   There is basically no chance of anything being prosecuted in this case.  If that is what you are looking for... forget it.

Even if the person used exceptions to have two FHA loans at the same time, there is still not enough for a case.

@John Jackson I agree with others here, you can prove a move to MA, and therefore the MA mortgage wouldn't be the one in question. Even if you can prove the loan is conventional on a property needing rehab, who do you plan to get in trouble? Wouldn't it be the bank that made an error, not the buyer. I don't see them reversing this deal, I do see you getting a lot of people upset, and if they have the same bravado as you... they will probably want to go after you legally. Just my .02 cents.

I'm in the middle of refinancing my house, and there is a question on it "Do you intend to make this your primary residence" or some variation.   If it's not where you intend to live when you check off the box, that's fraud.    

If the banks get their checks every month, I don't think they have any incentive to bust your friend.   What benefit does the bank have, if they are getting paid and everything is good-- to go verify occupancy?    They only care about $$$$.  If it's your friend, leave it up to karma to take care of it, not need IMO to be the morals police....  I have a friend who just bought her first investment property, but labeled it as primary residence, obviously had no intention to move there.... she was even bragging about it, but it's whatever... let the banks solve the puzzle, not you, not your problems.

@Nicole A. My objective as an REI in this property wasn't predicated on it being an arbitrary commodity, replaceable by some other one without regard. That's the problem for me. It's the only one there was, subjectively, and arguably objectively. So I'm running through all the 'free' avenues of redress I can find, and looking at everything by everyone to see if they did what they did legitimately. If they did, the space to investigate ends. If they could only have succeeded by breaking the law, then I will try to figure out if the law will correct it.

Originally posted by @Jay Hinrichs :

@JD Martin  @Russell Brazil   this is just someone who has no clue as to what the legal process's are and what it cost.

and to get a court ( and only a court ) can reverse a sale would cost probably as much in attornies fee's as the equity is worth if not more.. better to donate that time and money to a worthy charity..

 Billy Joel said it best:

I believe I've passed the age of consciousness and righteous rage
I found that just surviving was a noble fight
I once believed in causes too
I had my pointless point of view
And life went on no matter who was wrong or right.