I know someone that committed fraud in order to get a mortgage.he is going into foreclosure. what can he do?

Question

He is considering filing chapter 7 bankruptcy on both of his homes, but I think they will find out he committed fraud in order to get the loan. What can be done if anything to help him?

Answer 1

If he committed fraud and it is found out during the bankruptcy, he'll probably go to jail.

Bankruptcy is filed in Federal Court. All of your records of loans, payments, everything, are pretty much gone over.

By the way, you don't file chapter 7 "on homes". You file bankruptcy for yourself. If he wants to give up the homes in the course of the bankruptcy, those homes will be given back to the lender at that point. You don't, however, get to pick and choose what bills are included in the bankruptcy. So he doesn't get to file just on the two mortgages. Every financial record he's had is going to be looked at.

Answer 2

Filing bankruptcy will stop the foreclosure sale but it may cause more of a problem than he wants.

By definition a chapter 7 bankruptcy means that the debtor is turning over all assets of the estate to the court under the supervision of a Bankruptcy Trustee. If the rustee decides the houses have value (equity > debt) then the trustee will sell the house and pay off the underlying mortgage(s) and other debts.

However, if at the meeting of creditors (about one month after the filing of bankruptcy there is a meeting of creditors but in reality only the attorney for the debtor, the debtor who is examined and the trustee are in attendance) the trustee "abandons" the home then the bank will foreclose by getting the Bankruptcy judge to "lift" the stay which previously prevented the foreclosure.

So the houses will eventually be foreclosed on and now your friend has two foreclosures and a bankruptcy on his credit plus alerting the world to the fraud in getting the loans. Not a pretty picture.

A better alternative would be to (if the non-owner occupied house is vacant) advertise a rent to own, take over payments on the other home. Get a large down payment and apply it to the deliquency. Call the mortgage companies "loss mitigation" department and work-out the terms. Have the balance if the down payment does not cure the default put on the back end of the loan. This is called a loan modification.

Or sell the other home in a short sale where the house is sold but for less than the mortgage balance. "yes lenders will do this!!!!

GOod Luck

Answer 3

Of coarse the single looking for economic benefit is worse. She might want to no longer also be a sturdy mom to the newborn being that its only a meal fee ticket for her. otherwise besides the undeniable fact that deceptive isn't as malicious IMO and she will be able to definately a minimum of be a sturdy mom because her sole purpose replaced into to have a baby for the sake of having one.

Answer 4

You want to help someone who committed fraud to get 2 homes ? And because his BS backfired and now he has to pay the consequences ?

The better question is , what can be done to help you ?
You are nuts !

Answer 5

There are enough checks and balances that the lender could have uncovered anything improper. The best you can do is step aside so that you won't be considered an accessory.

Answer 6

How Did he get away with it They Check Credit/ and you bank accounts to see if you got money/ your employer/ or self employed too I getting one too But getting check out first I got my approveful? the Lender must be blind

Answer 7

Let him go down...people like your friend are not trust worthy... Even if I had the answer I would not help him. Moreover, ff I were you I would be very careful hanging around such bad apples... Let him go down!

Answer 8

legal advice - especially if the mortgage company knows.

Answer 9

There is nothing YOU should do. HE should find a good attorney.

Answer 10

tell him to sell the houses and repent.