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Two Words: Federal Endictment

There are many people who will do almost anything for a few bucks. If you’ve read my blog postings here and other places you know I’m no friend of the fraudster whether or not they claim to have some special super secret formula. Here’s the most common “formula” I’ve seen lately and it’s gaining in popularity.

I write often about the illegalities of cash back at closing and bird-dogging both of which artificially inflate the sales price of a property. Go ahead – fire back at me – this is my field of expertise and, as a lender, I’m very accustomed to defending my position.

There are numerous seminars teaching people how to get cash back at closing without committing mortgage or real estate fraud. NEWS FLASH: It ain’t working.

In a nutshell these people are teaching bird-dogs and buyers who want cash back at closing to create an LLC and name the seller as one of the partners. The LLC receives all the portion above what the seller wanted from the property and after the closing the LLC is dissolved with the proceeds going to all the members except the seller.

HELLO! That’s just a little transparent and very easy to detect. Do you know how it gets detected? I’ll show you in a moment. But first I want to tell you that the FBI is now endicting EVERYONE involved: real estate agents, bird-dogs, loan officers, closing agents, title agents, escrow agents, buyer, seller and even the builder.

Here’s the link to the case I’m citing:

http://www.mortgagefraudblog.com/images/uploads/US%20v.%20Ammons.pdf

Particularly section 2(f) – “shell” companies.

MORTGAGE FRAUD – DON’T DO IT!!!!

The way these people got caught was because one of the ball player’s homes was burned down by his girlfriend and he stopped making his payments. Then after a detailed investigation, as you can see must have taken place, all the rest of the details came out.

So regardless of what you read in that book or heard in that seminar there is NO WAY AROUND THE LAW.