Has anyone every heard of a morgage that you refinance every 4 months and the broker pays you half the rebate?

Question

I was approached by a broker that told me that I can set up a system with him that requires me to refinance my house every 4 months and he shares the lenders rebate with me. I would have to refinance at a much higher interest rate and he will pay me $2500 cash every 4 months. Has anyone ever heard of this or has a deal with a broker that is similar to this. The only info I can find on this is something called a "Dual Loan Scam". Is this the same thing? Is it a scam?

Answer 1

Report him to the state attorney office. Brokers like him give the rest of us a bad name. It is a scam, and if you go in with him, and he gets caught, you get caught too, and that means jail time, and attorney fees -

Do report him (ok), would you want someone like him helping a family member, friend with their financing needs, and personal information. If he is willing to do this, than what else is he into, with personal information he gets from clients......

We are licensed and governed by the state we are in, and licensed in. I for one would not want to loose my license and the lively hood for myself and my 2 sons. We have to follow the RESPA laws by the states. So again, report him.......

Good luck to you.

Answer 2

It is a scam. And a crime. Don't get involved and report this guy ASAP.

"She refinances for $80,000. With two lenders on the same day."

In NJ, after a loan commitment is issued but not more than 45 days before the closing documents will be recorded, the settlement agent is required to file what is called a "Notice of Settlement", which basically makes the loan commitment (not the actual commitment itself, but the name of the morgagor, mortgagee and the property) a matter of public record.

Since it appears in the rundown and on the title search, it's pretty much impossible for two lenders to unknowingly loan on the same property like that. Maybe other states should do the same thing.

Answer 3

Both the answers above couldn't be more true. Big time RESPA violation. And above all else, where do you think that money is coming from? It's coming out of your pocket! He's ripping you off. Just because he's offering to give you half of all the money he rips off from you, doesn't change the fact he's ripping you off!

Your instinct told you this or you wouldn't be asking the question. Good for you that you knew enough not to jump right in.

I do fraud programs for large lenders and broker groups. We call this "Fraud for Commission." It's when the loan originator commits fraud to get an undeserved commission. It's not as common as flipping, churning, equity skimming, or using straw borrowers, but it's out there. The dual loan scam involves closing two loans on the same property at the same time. Let's say a crook has a home worth $100,000. She refinances for $80,000. With two lenders on the same day. One is used to repay the current loan. The other is pocketed. "She" is often a stolen identity. Someone just got arrested for using a homeless person to do this. (What really bothered me is that the happened in Atlanta, but the homeless person was flown in from LA. What? Our homeless people here in GA aren't good enought??)

And a good source for information on mortgage fraud is www.mortgagefraudblogs.com.

Answer 4

It is a scam and a RESPA violation. You could both go to prison.