Subject To (SubTo) and Mortgage Fraud

[Ken M.]

If you read that as "SubTo IS Mortgage Fraud" go back to your 4th grade teacher and apologize for not listening in class about sentence structure.

Subject To is legal, when done legally.

The problem comes in when you fill out lending or tax forms and you omit information. Sure your SubTo mortgage doesn't show up on your credit report, but you still owe the money you took over when you did the SubTo. The government  demands that you list that on the forms. It is not an option. 

The form reads Click on to expand:

Prosecutors might file federal charges for bank fraud, loan and credit application fraud, wire fraud, or conspiracy to commit any of these crimes. They can also file federal racketeering charges under RICO (the Racketeer Influenced and Corrupt Organizations Act), especially in cases involving large-scale mortgage fraud schemes.

(18 U.S.C. §§ 1014, 1341, 1343, 1349 (2024).)

Loan application fraud statutes carry up to 30 years of prison time and $1,000,000 in fines. These penalties apply whether the defendant is the principal actor, attempted the offense, or conspired to commit fraud.

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You were smart enough to buy a property SubTo, don't be stupid enough to lie about it.

[Mike Grudzien]

Good post!