I Fuc*ed up! need help

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

4y

@John Underwood HUD (our Federal Government AND Fannie track these sales with all types of snoop Corelogic reports. It was sold for cash with big discount to foster housing initiatives. Besides the $10000 there can be criminal penalties. Best practice: ask for forgiveness before and see if he can get the fine down in half and charge it to new buyer.

John UnderwoodPro Member

Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes

4y

Originally posted by @Caroline Gerardo:

@John Underwood HUD (our Federal Government AND Fannie track these sales with all types of snoop Corelogic reports. It was sold for cash with big discount to foster housing initiatives. Besides the $10000 there can be criminal penalties. Best practice: ask for forgiveness before and see if he can get the fine down in half and charge it to new buyer.

That was one of my suggestions.

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

4y

There is a deed restriction and when the title changes, bing.

Fannie might ask you to give it back and allow someone else who meets the qualifications to purchase, there is a cost as you were given more than $10000 in costs to be eligible to buy this house.

Fannie can see: hazard insurance, names on utility bills, and they do check. Do not commit mortgage fraud. An extenuating circumstance waiver like job transfer, death of spouse, divorce, a big D disaster is the only way to get out of paying the $10000

John UnderwoodPro Member

Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes

4y

Originally posted by @Caroline Gerardo:

There is a deed restriction and when the title changes, bing. @John Underwood

No title change on renting for a year.

OP

Member since 2019 · 29 posts · 9 votes

4y

great advice you guys thanks so much. I definitely dont want to do anything sketchy that could make things worse... I have been thinking about calling FM to plea my case but didnt want to put a target on my back by doing so. I figured if i called and they said no id be under extra close scrutiny.

OP

Member since 2019 · 29 posts · 9 votes

4y

Thats why I wonder if its worth involving a lawyer, if i knew legally what constitutes primary residence... ive been living on the road for the past 2.5 years using my brothers house as primary residence yet i was never there. thats why if i kept things in my name and just had my buddy move in as "caretaker" or something until the year is up. that way he isnt renting and im also not selling prior to the 1 year

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Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes

4y

@Chris Mcmahan

Was this a document you signed at closing OR is there an actually deed restriction in place? Check you deed to see if there is an actual restriction. If not, there is no restriction in place to keep you from selling the property now. The chances they come after you are slim to none

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

4y

Don't pay for attorney. Ask in writing with an email (there is a form too fill out as well). They will send you an answer. You and whoever else signed the agreements (there are several you signed) need to reside there which is cross checked by: driver's license, IRS taxes, utility bills, USPS, etc need to have the address.

Is your posted name here the name on the deed...

OP

Member since 2019 · 29 posts · 9 votes

4y

Originally posted by @Greg H.:

@Chris Mcmahan

Was this a document you signed at closing OR is there an actually deed restriction in place? Check you deed to see if there is an actual restriction. If not, there is no restriction in place to keep you from selling the property now. The chances they come after you are slim to none

dont see anything in the deed, maybe worth calling the title company to doublecheck

OP

Member since 2019 · 29 posts · 9 votes

4y

Originally posted by @Caroline Gerardo:

Don't pay for attorney. Ask in writing with an email (there is a form too fill out as well). They will send you an answer. You and whoever else signed the agreements (there are several you signed) need to reside there which is cross checked by: driver's license, IRS taxes, utility bills, USPS, etc need to have the address.

Is your posted name here the name on the deed...

Not sure what youre asking about name on deed, it is in my name yes

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

4y

Chris you posted on a public website and your name is not John Smith if you decide to tip toe and rent the house they will see this post.

Greg H.Pro Member

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Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes

4y

Originally posted by @Caroline Gerardo:

Chris you posted on a public website and your name is not John Smith if you decide to tip toe and rent the house they will see this post.

That is a bit dramatic. He moved into the house and has decided to move to another state. He has not committed a crime or fraud in any way. You realize there is absolutely no enforcement of this right?

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Jill F.

Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes

4y

In the greater scheme of things, a year is not a very long time. I mean how long has it been since you closed? a month? It will take you two months to close when you sell. I would say suck it up, treat the house as a live in flip and use the nine months until you can list it to improve the property and to get yourself in the best possible situation for your planned move to Hawaii.

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Account Closed

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

4y

Originally posted by @Chris Mcmahan:

Hey guys, i really messed up. Out of desperation i bought a house for my family, we were pushed out of the west due to housing prices. Its a freddie mac home that requires us to keep it as our primary residence for 1 year. That was our intention but one month in we hate it here. We have been struggling with what to do in life and where to go for the past 2 years and buying this house made me realize IT IS NOT HERE. We have decided to follow our dreams and move to Hawaii where we will both be starting new lives and careers but dont know how to handle the house situation. Here is how the contract reads.

I actually just met someone that wants to buy it as is for what I have into it, so i wouldnt be making a profit but if FM finds out they will stick me with 10k fine. Is there a way we can structure a deal to sidestep this penalty? I paid cash for the house and have considered offering him seller financing. Technically I cant even rent to him. My idea would be to keep the bills and everything in my name, he would move in and I could pay him like 1$ to be my live in caretaker while we take off for hawaii. When the year is up we would make the transaction. I dont want to pay the 10k but I also dont want to be illegal. Can anyone advise? I just want out.

Your Comment: "I paid cash for the house"

My Response: "Say what?" If you paid cash, how is it a Freddie Mac home that has conditions of any sort?

4 Reply

Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes

4y

@Greg H. incorrect HUD and Fannie Mae get notified if deed is transferred. Our government discounts HUD houses and gave Chris $5000 in closing credits. Reckless to advise someone to commit a crime. http://www.area-ga.com/hud_for... Fine $250000 and 2 years. The 9548-D, contract package, and deed all have legalese explaining the penalties.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

if your really worried about it just pay the 10k and move.. I mean it worth it to live in Hawaii right ?

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Max T.

Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes

4y

@Chris Mcmahan

It’s less than 1 year. Just honor the contract.

Greg H.Pro Member

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Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes

4y

Originally posted by @Caroline Gerardo:

@Greg H. incorrect HUD and Fannie Mae get notified if deed is transferred. Our government discounts HUD houses and gave Chris $5000 in closing credits. Reckless to advise someone to commit a crime. http://www.area-ga.com/hud_for... Fine $250000 and 2 years. The 9548-D, contract package, and deed all have legalese explaining the penalties.

That is absolutely incorrect. HUD Fannie and Freddie have no enforcement division for this.

So how exactly do you think they get notified? You realize there is a lot of the country that still does not have Clerk records online right? Fannie and Freddie used to have deed restrictions which why I initially asked the question although they actually placed them in the deed only about 1/2 the time

Greg H.Pro Member

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Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes

4y

Originally posted by @Jay Hinrichs:

if your really worried about it just pay the 10k and move.. I mean it worth it to live in Hawaii right ?

Reality is that would probably take the entire year for Freddie to figure out who is supposed to collect the money as I have no doubt they have never enforced it! Lol

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Originally posted by @Greg H.:

Originally posted by @Caroline Gerardo:

@Greg H. incorrect HUD and Fannie Mae get notified if deed is transferred. Our government discounts HUD houses and gave Chris $5000 in closing credits. Reckless to advise someone to commit a crime. http://www.area-ga.com/hud_for... Fine $250000 and 2 years. The 9548-D, contract package, and deed all have legalese explaining the penalties.

That is absolutely incorrect. HUD Fannie and Freddie have no enforcement division for this.

So how exactly do you think they get notified? You realize there is a lot of the country that still does not have Clerk records online right? Fannie and Freddie used to have deed restrictions which why I initially asked the question although they actually placed them in the deed only about 1/2 the time

exactly Greg I was talking to an escrow officer in Maryland ( baltimore) and she said the county recorder is 4 to 5 months behind.

My clients I funded bought a property two months ago and are now selling.. but the deed showing that we funded it still is not of record.. pretty wild.. so I kind of agree with you there no way for anyone to track this stuff in certain markets. The title company closing our resale needs copies of our docs and then an e mail from the closer who closed our purchase stating that the deed has been transmitted to the county for recording. crazy I know

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Diane Dutt

Rental Property Investor · MD · Member since 2021 · 13 posts · 4 votes

4y

I’m thinking the buyer puts up the 10,000 in escrow as sort of a deposit… then proceed in a legal manner, have the chips fall where they may… pay the fine with it or eventually it goes back to them or remain s with you, I think the buyer has incentive to pay the 10k.

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

4y

Originally posted by @Jay Hinrichs:

Originally posted by @Greg H.:

Originally posted by @Caroline Gerardo:

@Greg H. incorrect HUD and Fannie Mae get notified if deed is transferred. Our government discounts HUD houses and gave Chris $5000 in closing credits. Reckless to advise someone to commit a crime. http://www.area-ga.com/hud_for... Fine $250000 and 2 years. The 9548-D, contract package, and deed all have legalese explaining the penalties.

That is absolutely incorrect. HUD Fannie and Freddie have no enforcement division for this.

So how exactly do you think they get notified? You realize there is a lot of the country that still does not have Clerk records online right? Fannie and Freddie used to have deed restrictions which why I initially asked the question although they actually placed them in the deed only about 1/2 the time

exactly Greg I was talking to an escrow officer in Maryland ( baltimore) and she said the county recorder is 4 to 5 months behind.

My clients I funded bought a property two months ago and are now selling.. but the deed showing that we funded it still is not of record.. pretty wild.. so I kind of agree with you there no way for anyone to track this stuff in certain markets. The title company closing our resale needs copies of our docs and then an e mail from the closer who closed our purchase stating that the deed has been transmitted to the county for recording. crazy I know

Ive seen 2 separate stories on Inman recently of people being prosecuted for mortgage fraud for flipping properties meant for owner occupants only. One was an agent in Pittsburgh, I forget where the other was. I think with the housing shortage, enforcement is stepping up in this area.

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