Is it illegal if the bank ok's a short sale for me to have my brother buy the property and then sell it back

Question

to me for the lower price?

Answer 1

Look the bank does not have to take a short sale, but if you fully disclosed the the lender the nature of the relationship between you and they sign off on an amount for the short sale, then its really immaterial what your bother does afterward with the place

But if you think your brother is just going to low ball the lender and the lender is going to agree to any amount you are sadly mistaken on how a short sale works

in general 9 out of 10 short sales fall through because the lender will not take the amount offered in the short sale, remember they have insurance on the note, it maybe economical feasible for the bank to go into foreclosure and take the insurance versus the short sale offer

Answer 2

They will not okay a short sale to a family member in the first place.  If you fail to disclose that, it is Fraud, and if they get wind of it later, they can have their Release set aside and go ahead and Foreclose the property.

Answer 3

Fraud.  Federal Offense.

Easily picked up on by the title.

Answer 4

Don't know.  But you would then need a new loan with a short sale on your record.  Could you qualify?

Answer 5

It's called mortgage fraud.  Yes it is illegal- and yes you will be caught.   Things like this are what is hurting the housing market.  Plus the fact that if you are short selling it means your mortgage payments are far enough behind that you will not qualify to buy another home.

Answer 6

Fraud Fraud Fraud!

Federal Offense.