Walking Away from One House and Buying Another

[Desertdog]

My question involves a foreclosure in the State of: Nevada



This should infuriate most people who try to live within their means ........

I work with a few people that have used their house as a cash register for the past few years. Refi's, seconds anything to keep cash coming. As we know this has come to an end and even they finally saw it.

When they finally realized there was just about no more cash accessible out of the home and it was worth a fraction of what they owed, they decided to buy one of the recently reduced foreclosures on the market. How did they do it? They took the last bit of their credit line on the first house and used it as a down payment on the bank owned house.

How this came to me was one of them asked me what I thought. I gave them my laymans opinion that it sounded like mortgage fraud or theft by deceit.

This has taken place over the past 6-9 months so I know they have all moved, and others have done the same.

There had to be some collusion by the broker, they did not make enough to cover both house payments. Did they say one was a rental? With the payment they owed the rent collected would have been a fraction of the payment.

This information has now gotten around the office and people are upset enough that he is afraid someone is going to turn them in. He still has not consulted an attorney.

Opinions?

[OhMy]

My question involves a foreclosure in the State of: Nevada



This should infuriate most people who try to live within their means ........

I work with a few people that have used their house as a cash register for the past few years. Refi's, seconds anything to keep cash coming. As we know this has come to an end and even they finally saw it.

When they finally realized there was just about no more cash accessible out of the home and it was worth a fraction of what they owed, they decided to buy one of the recently reduced foreclosures on the market. How did they do it? They took the last bit of their credit line on the first house and used it as a down payment on the bank owned house.

How this came to me was one of them asked me what I thought. I gave them my laymans opinion that it sounded like mortgage fraud or theft by deceit.

This has taken place over the past 6-9 months so I know they have all moved, and others have done the same.

There had to be some collusion by the broker, they did not make enough to cover both house payments. Did they say one was a rental? With the payment they owed the rent collected would have been a fraction of the payment.

This information has now gotten around the office and people are upset enough that he is afraid someone is going to turn them in. He still has not consulted an attorney.

Opinions?

Actually they did nothing wrong. While they are in their old house, before a foreclosure is final if they can qualify for a new mortgage to buy a foreclosure then they can.

Unless you know the full status on the old home you cant really say. The house could have been under a mothers name, or just the husband or wife.

Once you fall 30 days behind on a mortgage it is impossible to obtain another. The credit bureaus are very up on this. I am sure they purchased the new home another way.

Why should they consult an attorney? from the way I hear all this they did nothing wrong. If they did do something wrong, the new house mortgage would have never been approved.

[Desertdog]

I would agree with you if the funds for the down payment on the 2nd house didn't come from the home equity/line of credit of the 1st house. If the money came from another source non-issue but it didn't.

Would they get a District Attorney to pursue it, not likely but you never know. In Nevada they can pursue you for the deficiency after the house is sold at a loss anyways.

[OhMy]

I would agree with you if the funds for the down payment on the 2nd house didn't come from the home equity/line of credit of the 1st house. If the money came from another source non-issue but it didn't.

Would they get a District Attorney to pursue it, not likely but you never know. In Nevada they can pursue you for the deficiency after the house is sold at a loss anyways.

Dont mention NEVADA to me, I bought my house there in 2006 for $228,000 and I had a job transfer to Texas. Since the banks are selling my same house as foreclosures for $88,000 now, I am way underwater and I have rented mine out for a huge loss each month.

The only way the DA or the FBI would get involved is if there was mortgage fraud in the original mortgage. If no mortgage fraud then it is just a typical Clark county foreclosure. Just in Las Vegas, North Las Vegas and Henderson there are 55,000 pending foreclosures right now.

Yes in Nevada there are deficiency judgments issued on every foreclosure. Trying to collect on them is another story though