loan fraud in "seller rebate"? - Posted by Justin MacCarthy

Posted by Nate(DC) on October 10, 2003 at 13:19:58:

Well, an agreement to do something illegal is not enforceable in a court of law, for obvious reasons. So you can’t get the money back by suing the guy. You would have to resort to illegal means of your own to get it back.

Note that I am not a lawyer, nor am I advising you to do this. Just letting you know the basics.


loan fraud in “seller rebate”? - Posted by Justin MacCarthy

Posted by Justin MacCarthy on October 10, 2003 at 13:17:42:

I am looking for advice on a transaction that has me out of pocket
$2,400. I am from Ireland, and this was the first real estate transaction
in the US for my wife and I.

To keep this in general terms, I’ll ask whether there is anything I can do
in a situation where a contract is written for full list price, with the actual
purchase price agreed to be $14k lower. This was reflected in the
contract as $14,000 to be rebated by Seller at closing.

When all was said and done, our conventional lender used up as much of
this as they could in closing costs and credits and prepaids, and we did
receive a small rebate at the closing from the title company. However,
this still left a remainder of $2,400 which was aparently outside the
allowable legal limits for this transaction.

Apparently, this money had to go back to the seller, and we would
have to work it out between ourselves. The words “loan fraud” were
tossed around, and I began to wonder if I was legally entitled to this

Against my better judgement, I agreed (on a handshake) that the
remainder would be settled in private later in the day. Needless to say I
have not received the money and the guy is not returning my calls.

Is this $2,400 is lost forever?

The rest of this is a little factual - but goes to other possible remedies to
recoup this money.

The seller failed to deliver possession of the house for 6 days while his
son moved out (contract states that this will cost him $200 a day). He
also misrepresented several things to us, including the occupancy status
of the other half of the property (the other side is still occupied and we
did not get leases or rent deposits at the close). I finally took
possession yesterday when I found half of the house unlocked and all
doors open.

What really bites is that there was a 2 week delay in closing that was
our fault, and so we agreed to split the guy’s costs for those 14 days.
We amended the contract to reflect a $13,300 rebate instead of 14k. As
a thank you for our integrity, he walks away with another $2,400.

I feel pretty stupid, and know that if I was better informed going into
this I would have played it differently. Things are different in Ireland and
we would have had no problem getting the full sum at the closing table.

I would not normally consider legal action, and of course $2,400 is not a
HUGE sum of money. But I also feel that I cannot let this guy steal my
money and walk away with a smile…

I would really apreciate any advice from those in the legal profession
who see a solution to this, or from any others who have found a way to
resolve a similar situation. Thanks!

Justin (Denver, CO).