Is there any legal way for me to pay the homeowner and/or for the realtor to get paid?
Or is this illegal altogether? Does anyone know what the law explicitly states?
Thanks!
Posted in Renting & Real Estate
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Is there any legal way for me to pay the homeowner and/or for the realtor to get paid?
Or is this illegal altogether? Does anyone know what the law explicitly states?
Thanks!
Posted in Renting & Real Estate
In a short sale, the mortgage lender agrees to accept the proceeds of the sale as full settlement of the mortgage. The Realtor DOES get paid. The former owner does NOT get cash, but they ARE paid in the form of no longer having debt. A separate contract means you LIED to the mortgage company about the actual sale price. Even without a specific law, that is FRAUD. It is illegal EVERYWHERE in the US.
If you are hiding it from the lender I would iinterpret that to be fraud.
Each state may have laws that govern this situation. But in most cases, if the house is listed as a “short sale” the lender has the final acceptance responsibility. It is not longer up to the realtor nor the homeowner. So if you want to buy a home that is on a “short sale” you will have to deal thru the realtor to the lender.
NO, it is NOT legal.
The Real Estate Settlement Procedures Act (RESPA), states that ALL monies that are involved in a real estate transaction must appear on the HUD-1 settlement statement at closing.
Anything else is considered paid “outside of closing”…which is fine, as long as it appears on the HUD…but if it’s something that the bank doesn’t allow, and you work out a deal outside of the closing, it is a FELONY.
1. The contract is non-enforceable in court b/c the court systems won’t enforce an illegal contract….a judge would ask you to produce the HUD that matches the property.
2. The Realtor would lose their license.
3. The bank, if discovered, can sue the homeowner for what was paid out.
4. Everyone that touched illegal parts of the transaction can be charged with a Felony.
RESPA IS FEDERAL….so that it is in effect in ALL STATES.