Posted by Max-Va on October 15, 2006 at 21:22:34:
This is Loan Fraud if not disclosed to the lender. Fine and Jail time can be expected.
That said I believe it is done, but I would advise against it
Two step closing - Posted by Andrea Brown
Posted by Andrea Brown on October 15, 2006 at 17:20:38:
Hi,
I have a home that I’d like to sell to an investor. He will give me the money I asked for IF I do a two step closing.
Here’s his explanation: The 2 part close is basically a 2nd outside agreement
with the seller. It goes like this: Buyer and seller
agree on a price for the property (for this example
we’ll use 100K for the purchase price), the buyer
submits a purchase contract for the agreed upon
purchase price + what he would like to add for repairs
on the property (We’ll use 30K). The buyer just
submitted a contract for 130K but we have a 2nd
binding agreement, when the house closes the seller
will cut a check to the buyer for the 30K that was
added to the purchase contract.
It sounds straight forward enough, but it’s the first time I’ve heard it and just want to be sure this isn’t something that will bit me in the butt.
Thanks,
AB
Re: Two step closing - Posted by SpyBoy
Posted by SpyBoy on October 19, 2006 at 20:23:07:
You may want to visit a website, hosted by an attorney who specializes in mortgage fraud litigation representing banks and other industry player, at
to see what is happening to others doing these kinds of deals.
Re: Two step closing - Posted by River City
Posted by River City on October 16, 2006 at 13:28:41:
This rose smells like a thorn to me. Max is correct. If you do not disclose it to the lender, it is mortgage fraud. If you really want to know if it is ok to do this, ask your lender.