Agent

Fraud scheme piques mortgage broker’s interest

Borrower can't afford 2 loans, seeks relief in foreclosure

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DEAR BOB: I am a mortgage broker. One of my borrowers owns two properties. The first one is his primary residence. The other is a rental house. He intends to refinance and take maximum cash out from the investment property. Since he can't afford to make mortgage payments on both properties, he plans to default on the rental house by foreclosure. Is this a good or bad idea? What happens to the cash he gets from the refinance? --Julie H. DEAR JULIE: Can you spell f-r-a-u-d? If you knowingly participate in that fraudulent scheme, as a mortgage lender, you should lose your job and mortgage broker's license. Purchase Bob Bruss reports online. The borrower's credit will be ruined by the foreclosure and your reputation will be badly tarnished for participating because you knew he planned to default. Depending on the type of loan, especially FHA and VA, and the state where the property is located, the borrower could be liable to the mortgage lender for any deficiency judgment ...