Purchase Money?

This just happened is it legal?

Ad in local paper "Private Investors Needed, $50-$100 K, 14%, 1 year max , 75% LTV."

Private Lender answers ad agreeing to provide Purchase Money. Buyer now changes the terms to 12% and 3 points.

Borrower provides current values, shows LT under 75%. Escrow to provide Trust Deeds with Haz Ins and ALTA title Ins.

Escrow pays Borrower $478,000. by COE. Ins is canceled 1 month later for non payment, CLTA title policy issued. Lender never sees a closing statement.,

All 37 loans end up in foreclosure within less than a year. Borrower skims rents right up to the Trustee Sale then walks away with stuffed pockets.

Four months later he files a law suit against the lender for charging Usury Interest.

I thought Purchase Money could only be used to purchase the property. Is this what the late night RE guru's are selling "Purchase with no money down?"

Comments(2)

  • davehays12th March, 2004

    quite a scam, I really can't stand these prick scammers, they make me sick

  • bostonsaver13th March, 2004

    So as I thought this is not just creative RE investing!! LOL.

    Don't know why I'm laughing. This crook took my elderly folks for $804,000. and I've been trying to fight this crook for the last 3 years.

    Then this guy had the balls to sue us!!! It's a malicious law suit meant only to discourage and financially break us. It's cost $146,000. in legal fees so far fighting his BK and trying to have his suit dismissed.

    I feel the Escrow agent was involved in his scam but that's another issue. Wouldn't you know it, all new property is held in some 25 different Land Trusts

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