All Forum Posts by: Ken M.

Baltimore city's states attorney Marylin Mosby committed this fraud and got away with a slap on the wrist. I think it is shameful that the courts were so easy on her with such clear evidence against her.

Hers was a little different from this, but I get it. Not sure what the punishment should be for this. I'm not sure how they are catching people. People do it all the time. How do they know if someone didn't move into the property? I know with the VA loan, no one is staking out the residence to see if the person moved there. How are they finding out, outside of maybe them defaulting on the loan.

It's a lot easier than it seems in today's computerized world to catch fraud.

Most people don't realize that with mortgage fraud, they include wire fraud (escrow transfers funds by wire ) and bank fraud. The transaction involves a bank. There can be other charges as well. Pretty simple to make it stick. There's a "paper trail". But, as stated above there is neither the will nor the man power to charge for "simple fraud". Prosecute Large, flagrant fraud on occasion, maybe.

If you do a simple driver's license address to home address match, to loan address match, IRS tax address to home address match, to loan address match, you could probably identify a great deal of fraud. But that's gestapo tactics and I don't think that'd be tolerated.

If you sent a letter to every government loan borrower in the last year and required the address of the borrower be filled out and compared it to the existing databases, you'd have the same information, If someone didn't return the information, you call the loan due.

I mean there are ways to do it, but then what? You have a mess on your hands. ;-)

The solution is to not offer a discount for owner occupied homes, don't make the requirement in the first place, stop playing games with it and be more honest as a government,

That's just not going to happen either.

Mortgage fraud charges can be used as a "hammer" or threat, when dealing with other charges.

1 Vote

Quote from @V.G Jason:

Do not think it's this that breaks the camel back.

It's likely something we don't expect.

Or the consistent inventory that delists by Oct/Nov, re-lists the following March coupled with new inventory that creates an inventory logjam.

It's also now not just rates that are preventing sellers from selling-- it's also being underwater on the loan.

And people just don't have the income to qualify. Even if rates were dropped, it won't be enough to offset the huge increase in the property, increased insurance costs increased tax costs. A lot of markets are maxed out. (not all markets of course, it's a big country, but a lot of markets are at too high of a debt to income level).

Inventory has doubled in Phoenix in the last couple of months. DOM over 90 is consistently growing. People aren't buying. The West Coast is slowing down.

0 Votes

Quote from @Moses Stealy:

Crime rate your chance of becoming a victim of a violent or property crime in Hartford is about 1 in 30. So I was just wondering what would be the best way to go by this property.

71 Martin Street, Hartford CT

I would never buy a property worse than the neighborhood I grew up in. Some people can do that but, I wouldn't recommend it. You are equipped to deal with the problems of the
neighborhood you grew up in, or better.

0 Votes

Hartford, Connecticut

Quote from @Jay Hinrichs:

Quote from @Mark F.:

1000% no and here’s why. Enforcement on a wide spread scale will NEVER happen. I have personal knowledge on this and it is impossible for the federal government to investigate and prosecute this in a way that would have any real effect on the housing market. I could go on and on about it but I’ll just leave this one tidbit. They just cut 700 vacant FBI positions. Link below.

Your counter point will be “but that tech Director guy said they got AI to help root it out!” That’s great but you don’t understand how investigations work. You can identify it all you want but if there’s no investigators or AUSAs to take the case, nothing happens criminally. Sure, they could call the loan due or force them out or whatever but FHFA has no teeth in actual investigations as that is done by the FBI. Link to that story below.

https://abc3340.com/news/nation-world/doj-plans-to-cut-addit...

https://fedscoop.com/fannie-mae-partners-with-palantir-on-mo...

YUP its the FBI that follows up on these cases.. And they know where the fraud clusters are .

The fraud cases I'm following were brought and are being prosecuted by States Attorney General. No FBI involved. Most states (if not all) have mortgage fraud statutes, too. I suspect the IRS, FDIC and a number of other agencies can initiate prosecutions, but why would they?

As we saw in the last collapse (2008) no one gets excited until everything is on the brink. ;-) I remember watching George Bush on the White House Steps saying "OOPs, we're screwed". or something to that effect. And Alan Greenspan of the Fed said "Well, I didn't see it coming".
Then it's fire engines and shovels and "liar, liar, hair on fire" The agencies are reactive, not pro-active.

0 Votes

Quote from @Waylon Bruce Moore:

We normally have been using our cash to buy, reno, and hold houses for rentals. Recently, my neighbor approached us about buying her home. It needs extensive renovations, and we would probably flip it once finished. There is a return of about 16% and annualized 33%. one of my close friends recently offered to fund any projects we were going to do and since i dont have much expereince in getting loans what is the normal return i should offer them for a loan of about 400k over a 6 month time frame (purchase-reno-sale)?

Some hard money lenders want 1% or 2% upfront with 8% to 12% interest. It just depends. There is actually more to it with Hard Money lenders, they typically won't go over 70% LTV, they decide the ARV, they make you buy the materials and do the work and upon their approval repay you for the materials. Others, once you are experienced and use them a few times, will wire transfer funds and you use their money. As stated, it just depends. Every Hard Money Lender is different. It's the golden rule. They have the gold, so they make the rules. You have the advantage of turning them down and trying a different lender.

Friends and family a straight 10% to 12% with nothing upfront.
Don't forget there is a need for a title Report, Escrow, property taxes, HOA, and other assessments. (Water, Garbage, electrical, and whatever)

1 Vote

Tampa, Florida

Quote from @Julyana Silveira:

Has anyone here bought or sold a property using a structure where the buyer doesn’t get the deed, but instead buys membership units in an LLC that owns the home?

I'm looking at a deal for my mom where she'd be making a down payment and monthly payments in exchange for units in the LLC. The contract says she'll gradually earn equity (2.681 units/month), and once she reaches 1000 units she owns the LLC and therefore controls the property.

A few things that concern me:

She doesn’t have direct title or deed to the home
If she misses a payment and doesn’t fix it in 30 days, she loses all membership units she’s earned...no refund
She can’t sell her share or ask to sell the house until she reaches 20% ownership (200 units), and even then it’s subject to manager approval
She can't rent the property without permission, even though she'd be paying monthly like an owner
The manager (seller) can never be removed from control until/unless she owns the entire LLC

The structure is kind of a mix between rent-to-own and seller financing, but it feels heavily weighted in the seller’s favor. Has anyone done or structured a deal like this before? Pros, cons, horror stories, or anything I should watch for?

Would really appreciate any advice or personal experience.

She's a dreamer. She doesn't know what she's doing. Simply making stuff up.

0 Votes

Quote from @Brandon Hawkins:

What steps can a family take to ensure maximum protection of their assets when entering the real estate investment market?

Appropriate protections might include Umbrella Insurance, Equity Stripping (the legal kind), having a loan on a property (not having it being free & clear), Using the property's street address as the LLC name instead of using your own name, changing the password on your accounts every 90 days and using 10 character passwords and two point authentication. Not having online access at all to your banking accounts, not clicking on links you don't know, using a mailbox address instead of your home address, you know, the usual stuff.

Nothing is guaranteed but it will slow down the bad guys.

0 Votes

Quote from @Chris Seveney:

Quote from @Ken M.:

Buy At Least 10% Below List On MLS

************************************

Let's indulge in some basic logic:

The only variables are how and when Housing Bubble #2 will burst.

The incentive (lower mortgage rates) to commit fraud by claiming to be an owner-occupant rather than an investor has pushed mortgage fraud to levels that Federal Reserve researchers declare "rampant." Owner-Occupancy Fraud and Mortgage Performance (A 46-page PDF report is available on this link.)

Here's how Housing Bubble #2 bursts: buyers of overvalued, money-losing properties vanish, those who waited too long sink underwater (sales prices are lower than what they paid), marginal investors default, owner-occupants who lose their jobs sell or default, private equity realizes their losses will only increase the longer they hold off selling, and the momentum of sellers far outnumbering buyers cascades.

Greed is replaced by fear, and then by the realization it's too late to exit without losses. This is how bubbles burst.

https://www.zerohedge.com/personal-finance/how-housing-bubbl...

I agree with Jay, its not a big enough market share to cause a bubble to burst - also are we speaking nationally or locally. we are seeing bubbles burst in certain markets that are specific to that market which is based on forgetting the fundamentals of supply and demand along with affordability. People tend to forget that if income in an area does not keep up with home prices, then prices in that area will come down as there is not going to be an influx of people moving to that area to buy those homes.

One simple case study is austin, which its still a great investment for those that bought ten years ago but those who bought recently thinking prices only go up are in to learn a hard lesson.

Timing has a lot to do with success or loss. Agreed.

0 Votes

Quote from @Mark F.:

https://abc3340.com/news/nation-world/doj-plans-to-cut-addit...

https://fedscoop.com/fannie-mae-partners-with-palantir-on-mo...

I agree. I know of a few cases of fraud myself, and they just carry on as though it's the normal thing. Well, it is the normal thing, unfortunately. But I don't think it will be criminally charged.

I think the more likelihood is of banks calling loans due. Would that crash the market? Probably not, but it might put further restraints on lending, more caution, which hurts purchases.

And some huge number of people with student loans just got a big hit to their credit score.
And, It can't be helping to have a lot of money out at sub 3%. The banks will want that "problem" corrected.

A big case of fraud filed in Phoenix March 7, 2025 is now only to the "FIRST AMENDED COMPLAINT" stage. There is a loooong way to go on this one.

From The Docket CV2025-008402 - Phoenix AZ
"6/10/2025 AMC - Amended Complaint 6/10/2025 NOTE:FIRST AMENDED COMPLAINT"

I think fraud is so rampant, it's like the Biden Boarder Debacle.

1 Vote

All Forum Posts by: Ken M.

Ken M. has started 83 posts and replied 1119 times.

Post: Will Mortgage Fraud Burst The Housing Bubble ? How Do You Prepare ?

Post: Will Mortgage Fraud Burst The Housing Bubble ? How Do You Prepare ?

Post: Will Mortgage Fraud Burst The Housing Bubble ? How Do You Prepare ?

Post: the spreadsheet says go, but the neighborhood says pause.

Post: Will Mortgage Fraud Burst The Housing Bubble ? How Do You Prepare ?

Post: need to know what the normal cost is for borrowing money from a friend for a rehab.

Post: Anyone Familiar with LLC-Based Home Purchase Structures Like This?

Post: Securing family assets vs real estate investment properties

Post: Will Mortgage Fraud Burst The Housing Bubble ? How Do You Prepare ?

Post: Will Mortgage Fraud Burst The Housing Bubble ? How Do You Prepare ?