Today I spent 3 hours in class over at the Kansas City Regional Association of REALTORs. It’s a required class and mostly review. But I did like that the handout had these following red flags:
- Assurances not to worry about the appraisal.
- Silent Second Mortgages, Texas Earnest Money (i.e. a seller carry-back that is forgiven at closing).
- Promises to the buyer that the property will be leased or rented in behalf of the buyer and the loan payments, insurance, etc. will be covered.
- A new immigrant is told to use someone else’s social security number.
- Certain items are omitted from the HUD-1 closing statement.
- Advance down payment amounts which are falsely represented as being paid by the borrower.
- Quit claim the property back to seller or co-conspirator without notice to or permission from the lender.
- Resubmission of the listing to MLS for a higher list price so it will coincide with the inflated contract.
- There are an unusual number of addenda to the purchase contract.
- Last minute invoices are submitted to the closing agent.
- Unusual expenses are paid by the seller, such as large repair charges, and/or charitable donations.
- Lenders or mortgage broker not willing to commit something to writing.
- Mortgage broker does not want real estate professional to contact lender or investor to alleviate concerns.
BBQ Capital | Kansas City Real Estate Investing 