Help Make This Come Together
My sister is leasing a condo and the landlord has been pocketing the rental payment and not paying the mortgage. The condo is worth 75k and the mortgage balance is 65k. He is behind $3,500. The condo fee is also behind $850. My sister wants to buy the place and I see an opportunity here to make some cash for myself, but her credit is not good enough to qualify for a conventional mortgage and she doesn't have any cash besides the monthly rental payment. Not sure how to create a deal here as I don't see a way to get any cash out or acquire the property. Any suggestions?
Rent/Equity Skim: The perpetrator collects rent and makes no payments to the
secured lenders.
Civil Responses To Consider
· Seek sanctions prepetrator if appropriate
· Motion to compel perpetrator of fraud to appear in court. Seek contempt if person fails to
· appear
· Provide assistance to debtor victims
Criminal Responses To Consider
Mail Fraud, 18 U.S.C. Section 1341: Misrepresentations to homeowners and the use of
U.S. mail.
Wire Fraud, 18 U.S.C. Section 1343: Misrepresentations to homeowners and the use of
interstate wires
Tax Fraud, 26 U.S.C. 7202, 7203, 7206 and 7212: A failure to pay taxes on assets,
failure to file returns, or the filing of a false return in an effort to conceal the scheme.
1997--Pub. L. 105-65 amended section generally. Prior to amendment, section read as follows: ``Whoever, as an owner, agent, or manager, or who is otherwise in custody, control, or possession of property that is security for a mortgage note that is insured, acquired, or held by the Secretary pursuant to section 1709, 1713, 1715e, 1715k, 1715l(d)(3), 1715l(d)(4), 1715n(f), 1715v, 1715w, 1715y, 1715z-1, 1715z-3(c), 1715z- 6, 1715z-7, 1715z-9, 1743, or 1748h-2 of this title, or subchapter IX-B of this chapter, or is made pursuant to section 1701q of this title, willfully uses or authorizes the use of any part of the rents, assets, proceeds, income or other funds derived from property covered by such mortgage note during a period when the mortgage note is in default or the project is in a nonsurplus cash position as defined by the regulatory agreement covering such property, for any purpose other than to meet actual or necessary expenses that include expenses approved by the Secretary if such approval is required under the terms of the regulatory agreement, shall be fined not more than $250,000 or imprisoned not more than 5 years, or both.''
This could be an avenue to help your sister, as always you may wish to seek legal counsel.
So does the sister live in Florida or only you?
At what point in the process did you discover the problem.
The reason I ask is that her rights are probably affected by how the state foreclosure law works.
1) do not pay any more rent to the landlord. Establish an escrow account (with the clerk of courts if the foreclosure suit has already been filed) and pay future rent payments to the escrow.
2) get a lawyer.
3) Given the possibility of severe civil and criminal penalties (as John has so eloquently pointed out) you may be able to get the "landlord" to quitclaim to the sister. Make the payments to re-instate the mortgage and you have essentially done a Sub-to transaction. Sister's credit is irrelevant because she is going to take over the landlords mortgage and no matter how bad she is she is better than the gonif they've got now.