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Is this illegal?
Comments
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This is mortgage fraud first of all as the buyer is lying to the lender about the amount he is paying for the house so is securing a loan for £25k more than the asset is worth.
If you were to transfer the money back to him then that would be reported as a suspicious transaction to the Money Laundering Reporting Officers at your and your purchaser's banks. The money transfer should then be investigated (and probably would be given the apparent crudeness of this fraud). You would be asked why you had transferred the money and he would be asked the same thing and you'd be expected to come up with a good reason (ie not 'I won it on a horse').
You would then be implicated as having helped this person commit fraud (presumably a criminal act in itself).
I wouldn't get involved in this at all as there seems to be nothing in it for you apart from the opportunity to play 'hide the sausage' with Mr Big in the prison showers. I suppose you could just take the £25k and not hand it over - a fraudster is pretty unlikely to press charges for theft! Of course he might break your knees or something in retaliation.
Whether or not you and he consider this to be fraud is completely immaterial.0 -
[STRIKE]
maybe you should say youll do it but you want to have £7500 for your troubles
[/STRIKE]
sorry was being naughty i would speak to your solicitor
Slimming world start 28/01/2012 starting weight 21st 2.5lb current weight 17st 9-total loss 3st 7.5lb
Slimmer of the month February , March ,April
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The buyer is a chancer and is up to no good.
Regardless of whether it's legal (I don't think it is), I doubt that the lender would value it at the higher price anyway. So he wouldn't get the 195k to start with.dolce vita's stock reply templates
#1. The people that run these "sell your house and rent back" companies are generally lying thieves and are best avoided
#2. This time next year house prices in general will be lower than they are now
#3. Cheap houses are a good thing not a bad thing0 -
dolce_vita wrote: »The buyer is a chancer and is up to no good.
Regardless of whether it's legal (I don't think it is), I doubt that the lender would value it at the higher price anyway. So he wouldn't get the 195k to start with.
In the US what is now being uncovered is that valuers have been complicit with fraudsters to overvalue houses to obtain a mortgage for more than the property is worth.
It's a great scam if house prices are rising. Get a mortgage for £25k more than the house is worth. Use that money to do the place up. Then sell and make a packet as you've got 6 months (or whatever) of general price increases plus you've added some value to the house, hopefully at least. The bank gets their money back and so everyone's happy. Why it's barely fraud at all.
The trouble comes if the bank doesn't get it's money back because the price of the house has fallen and so you can't clear the mortgage when you sell. They start investigating transactions then to see if they can salvage some more money from the situation. The harmless non-fraud is suddenly being asked about by the boys from the local constabulary.0 -
Like you say Gen, it works great in fast rising market.
But now?dolce vita's stock reply templates
#1. The people that run these "sell your house and rent back" companies are generally lying thieves and are best avoided
#2. This time next year house prices in general will be lower than they are now
#3. Cheap houses are a good thing not a bad thing0 -
dolce_vita wrote: »Like you say Gen, it works great in fast rising market.
But now?
With the fraud in the OP it's just a non-starter I would say because it's too crude. Basically it relies on luck not to be picked up.
With more subtle forms of fraud if you keep paying the mortgage then you're ok. If you stop then you find the spotlight can turn on you. Were you really earning £50k like you said on your mortgage application? Why does the taxman think you earn £40k? Where did the deposit money come from?
JK Galbraith (left wing American economist) writes much better than me on this stuff. Check out what he has to say about "bezzle". Basically, it's the increase in wealth experienced during the period between a fraud being committed and it being discovered.0 -
With the fraud in the OP it's just a non-starter I would say because it's too crude. Basically it relies on luck not to be picked up.
With more subtle forms of fraud if you keep paying the mortgage then you're ok. If you stop then you find the spotlight can turn on you. Were you really earning £50k like you said on your mortgage application? Why does the taxman think you earn £40k? Where did the deposit money come from?
And in a downturn, the spotlight also turns on the valuer of the house :
"How on earth could you value that pile of !!!!!! at £xxxxx"dolce vita's stock reply templates
#1. The people that run these "sell your house and rent back" companies are generally lying thieves and are best avoided
#2. This time next year house prices in general will be lower than they are now
#3. Cheap houses are a good thing not a bad thing0 -
dolce_vita wrote: »And in a downturn, the spotlight also turns on the valuer of the house :
"How on earth could you value that pile of !!!!!! at £xxxxx"
Correct although the valuers will all have something in the small print about how they're just offering an opinion and all that guff.
In the US there have been several cases of valuers being complicit in mortgage fraud which is obviously different.
Eg link.....I'm sure you can use Google just as well as I can for other examples dolce vita.0 -
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This sounds like it will never get off the ground anyway. If your house has been valued at £170k the purchaser will never get a mortgage of £195k. If your house is actually worth £195k why would you sell it for £170k? As someone else has already said, there is no reason for you to get drawn into fraud. Tell them to take a hike.0
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