Don’t Put Your Client In Jail

February 7, 2009 by  
Filed under Short Sale Do's & Don'ts

jail-2-guys-cropped70 Don’t do a short sale if your seller took out a “liar loan” i.e. a loan with stated income where the amount of the income on the loan application is well above what the seller actually made. Why? When you submit an package for a short sale, you will have to give the same lender complete financial information for the same borrower. Frequently, that information will be for the same time period as the loan application. When you give the same lender all of the seller’s actual financial information for the same period of time as the loan application, you will provide proof that the seller committed loan fraud when the loan was originated. Don’t do a short sale that will put your client in jail.

You could be the guy standing next to him in jail.

There were a number of abuses in obtaining loans in the last few years. Before you decide to work with a seller on a short sale, you need to find out if the loan that is not going to be paid off was obtained by any of these abuses. If so, I do not suggest that you walk away, I suggest that you RUN.

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