Mortgage Fraud...trying to keep my downpayment! Who do I notify?
I tried to purchase a short sale a few months ago but the sellers were committing mortgage fraud so we walked away. The bank agreed to a price that we could live with but the sellers wouldn't sign the addendum to the contract until we gave them $6500 under the table. They wrote up a contract for the sale of personal property (or shall I say their attorney did) in the amount of $5000 but we would not sign it. When it came down to the end they wanted more and told us they wouldn't sign the addendum until we signed the other contract. We said we wouldn't commit fraud and walked away. Now they are refusing to give back our downpayment. These people are the scum of the earth. I plan on calling the Federal Trade Commission and my Attorney General but I was wondering if anyone at BofA would care. They are in the process with someone else (i'm sure with the hopes of money under the table). Does anyone now of who to contact at Bank of America?
Replies to This Discussion
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Permalink Reply by Jeff Payne on
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If the seller did not sign the addendum then you have no contract. I assume that you did not have a down payment, rather an Escrow Money Deposit. No contract, no escrow money needed. Who is holding the money? Make a demand to the company holding the money.
Not so sure that this is fraud, it could be or couldn't be but I see people sell their personal property outside of a contract all of the time. It does smell funny that they used their personal property to hold the contract hostage :( -
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Permalink Reply by Dawn Jones on
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HI SUZANNE!
HONESTLY ~ CALL YOUR LOCAL TV NEWS CHANNEL!!! THAT IS THE BEST, BRIGHTEST, AND SAFEST PLACE TO GO AND THAT CHANNEL WILL EAT THAT UP - ESPECIALLY WITH THE CURRENT MARKET STATE. WHAT STATE ARE YOU IN?
DAWN -
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Permalink Reply by Suzanne on
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The attorney is holding the money in escrow. We received a letter from him today stating that they will not release it. I am aware that there is no contract because they never signed...neither did we for that matter. We did not trust them from the beginning. When you rip the bank off for 400K you are not trustworthy. They bank agreed to sell for 375K and their mortgage is just shy of 800K. I wonder if BofA would just foreclose if they knew of this.
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Permalink Reply by Jim Schneider on
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Unless the sellers' sign a letter of authorization (which is unlikely) BofA is not going to speak with you because of privacy concerns. I'm not sure from your statement if you already signed a contract with the sellers, if you had an earnest money deposit, or if you just made an offer (usually called a binder in NY) and the seller is refusing to sign a contract without the side agreement. Please clarify.
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Permalink Reply by Keji Ogunleye on
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Have the same situation last year- It turns out the seller and buyer know each other so when the seller called them to have a meeting with them regarding the contract they are okay with. They called me to let me know and wanted me to be at the meeting... so when we go to the house ... the seller essentially wants the buyers to give $10K under the table .. I was so embrassed to me sitting there,but my buyers promptly refused.- The seller further informed us that his agent has been trying to get someone that will give him the money.. total fraud...
Suzanne are you working with an agent for the short sale? Call your agent and call the other agent's broker.. Write a letter back to the attorney that you will send all the document regarding the cash back to FDIC and your state attorney general's office... -
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Suzanne -
Where is your REALTOR ??? Are you represented by someone or are you an unrepresented buyer?
There are a few things you can do.
1) CONTACT YOUR ATTORNEY !!
2) Contact the local District Attorney's Office of RE Fraud - almost every county in the USA has a Division that specializes in RE Fraud with what's going on right now. Here in OC California they are locking people up for what your describing - escpecially attorneys who are participating.
3) Notify Bank of America's Fraud Division. You should be able to find the local BofA Home Retention Center VP, and explain what happened to you. They won't care about your deal, but they certainly care about what's happening with regard to the property and antics the borrower may be up to. Put it in writing to BofA but be sure not to slander or defame the seller / borrower.
4) As someone else said, contact the Media, NBC, CBS, ABC, CNN, FOX, etc. and do it quietly so that when it hits the news you will not be discredited as a "loud mouth".
5) Again - most important - TALK TO YOUR ATTORNEY and have him/her find out what's going on with your $$$.
Best of luck,
Thom Colby
Broker
Newport Beach CA -
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We had fully executed contracts that were delivered to BofA before they were even approved for the short sale. We agreed to a purchase price of 325K on the originally contracts but BofA did not accept that. They wanted 375K and would have been okay with simply signing and submitting an addendum. We were okay with that bld ut they would not sign unless they got their money so we walked away. There was no contract, but they are not releasing our money knowing full well that we will have to take them to court to get it. My husband is a attorney. We know they can't keep it, they are just being jerks! I would like to report them for trying to take advantage of us.
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Permalink Reply by Marty Hackworth on
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This example can serve as a great lesson to any other buyers considering a short sale. Always include a short sale addendum with your offers that states that the time from for deliverance of the deposit and contingency periods do not begin until there is written acceptance of the short sale. Suzanne, I'm sorry, I know this does nothing for you now, but it will moving forward.
As for the deposit. An escrow company holds zero policing power. They can only act on the the agreed terms of two parties. That being said, they can not release the deposit to the buyer without your written consent. I would prepare a cancellation of contract outlining the reason for your cancellation (fraud - you are correct in assuming this is fraud as every short sale approval I have seen mentions the seller must not benefit financially in any way.) and send it certified return receipt requested to the seller. Give them one business week them send them a demand to quit and forfeit deposit. If that does not work, you may need to pursue action in small claims court. I would definitely hire an attorney to help you at this point.
Hope that helps, Marty -
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My husband is an attorney. He sent a letter to the sellers attorney last week and received notice from their attorney that they are not agreeing to release the deposit. The attorney is acting on behalf of his client...the sellers and is refusing to release the money that is being held in the attorney's escrow account.
As for the deposit. An escrow company holds zero policing power. They can only act on the the agreed terms of two parties. That being said, they can not release the deposit to the buyer without your written consent. I would prepare a cancellation of contract outlining the reason for your cancellation (fraud - you are correct in assuming this is fraud as every short sale approval I have seen mentions the seller must not benefit financially in any way.) and send it certified return receipt requested to the seller. Give them one business week them send them a demand to quit and forfeit deposit. If that does not work, you may need to pursue action in small claims court. I would definitely hire an attorney to help you at this point.
Hope that helps, Marty -
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Permalink Reply by Jim Hale on
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Was there personal property being sold along with the house that would truly approximate the value of the side contract?
If so, then fraud may not be an issue.
If not, it sure sounds like fraud.
Your husband, the attorney, should know whether it's fraud.....and what to do about an attorney aiding and abetting fraud.
If the lender knew about this, the seller would likely be facing not only foreclosure, but charges of mortgage fraud.
BofA phone numbers are all over this website. -
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I called our local DA but they are really backed up...apparently we have a lot of criminals. The people had NOTHING of value so the side contract is fraud and I plan on letting the DA know about the attorney. My husband will take them to court to get our money back but what a hassel! Hopefully the idea of prosecution from the DA's office will scare them so much that they will just release our money. I think they should be prosecuted regardless. I tried calling Bank of America but no one seems to care! My goal is to let BofA know that someone is trying to get one over on them. I'll continue trying today.
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