The "gift of equity" and the "loose fly"!!

 Earlier today, I received a call from the Realtor/Mortgage Broker(RMB) on one of my pending deals. I was kind of expecting it but was hoping it would happen sooner rather than later. You see when this guy called me about a month ago, to let me know he was sending over an offer for one of my listing, the caller ID on my cell phone read FRAUD!

When I was speaking with him I couldn't for the life of me remember why I had his number programmed in as FRAUD! Anyway, since it was an office number, I decided to give this guy the benefit of a doubt and we negotiated an acceptable deal with my Seller. I did all of my homework and actually had one of my trusted mortgage brokers review the Buyer's situation. All looked good to go.

The Buyer was getting a loan of 100% through Country Wide with the Seller paying 3% towards closing costs. Anyway, to make a long story short, CW denied the loan yesterday. Today, the Realtor/Mortgage Broker (RMB) called to let me know we could still get this closed if the Seller was willing to do a "gift of equity". It seems the appraisal came back at $187,000 and the agreed purchase price is $150,000. So RMB's bright idea was to inflate the contract to $180,000 and have the Seller write a letter "gifting" 20% of his "equity" to the Buyer.

RMB assured me this was perfectly legal as long as the Seller was a family member of the Buyer. Well OK then. Not only we will inflate the purchase price by 20% but we will also have the Seller lie and say he is a family member!!

Nope can't do that. The property is back on the market and NOW I remember why his phone number was programmed in as FRAUD! I just changed it by the way to FRAUD2! Next time I'll remember.

A little later today I received a call from the REALTOR® on one of my other transactions. This has been a very difficult transaction as the first Lender went out of business and we had to change Lenders about a month ago. Also, we are working with a Down Payment Assistance Program who is granting the Buyer $20,000. After providing them with tons of documentation we finally were within about 10 days of getting this deal closed.

The REALTOR® says, "The buyer has decided not to move forward with the closing." I say, "What the……!!!". The REALTOR® explained to me that Mrs. Buyer came home from work early yesterday and caught Mr. Buyer in bed with………!!! Well just use your imagination on this one. Let's just say they ain't closing on this house. They will be meeting with an Attorney but it won't be to discuss real estate!

The moral of the first story is: "Don't ask Broker Bryant and his Sellers to commit FRAUD! It ain't happenin' on my watch."

The moral of the second story is: "Please keep your fly zipped until AFTER you get your house!"

A day in the life of a listing Broker. How was your day?

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