My husband happened to come in contact with a mortgage company in his bidding on an office park paint job.
He told the owner that he was interested in fixing and flipping and wondered if they had loans for contractor’s to buy a house and have money for the repairs while rehabbing.
The owner put us into contact with a gal in his office, that operates under a real estate company and builder, etc.
First, she had us look at 2 projects that she had on fixing with us giving a bid for the repairs. The first needed in excess of 50K with major foundation problems, that another contractor told her that he could mudjack the foundation and it would only cost 20k to rehab and make “Cherry” to sell for 250k. Her purchase price was 132k on 1 acre. She did not like the fact that we told her permits were required and she was not going to replace windows. This house built in the 1940’s.
The next house was a pretty easy fix and flip. Carpet 3 levels, new vinyl, tile, counters, int/ext paint. Gave bid for 10.5k. Said it was too high. I think she is looking for flunkies to do the work cheap, we told her we would not put our license or reputation on the line for a permit job without pulling one. I informed her that I had to do my due diligence and she said, "Don’t wait too long, because I have many more people willing to do this with us.
So, the next thing she pulls out a loan application and tried to get us to sign these loan papers and told us she was going to do a “soft pull” of our credit which would not affect our FICO. I was not comfortable with this but my husband gave our birthdates. She calls later that night, saying she got his credit report, but could not get mine because I had some alert on my credit. She wanted my SS#. I refused to give it.
My questions are:
How could she pull our credit with out our signatures?
Could she have found our SS# through public records?
Is this fraud?
What are the criteria for picking a mortgage broker?
Could I do better by getting a HELOC on my equity?
Our house is worth about 170k, we owe 49k. She tells me that she can get us a mortgage for 140k @7.5%. I tell her that is too high since I have a 10 year @6%. Then she says she can match it.
She tells us that there are very few deals out here and she has 20 people looking on a daily basis for deals and she thinks that we could do a deal and she always does the deal so she makes 15k and we would make 15k. Of course, she is also a real estate broker, so she would be listing and selling which I assume means she will be making a commission for selling.
I did not give away that I have some prior knowledge of real estate and the like, so I started doing research. The mortgage company is not a BBB member and has an unsatisfactory rating. The women has been in California, Arizona and Colorado but does not own a home here. There is no record of any length and she has just incorporated here.
Every thing in my gut says run fast and far because they are predators. But these people keep calling and say, "We have good news for you. We found information on the 4-plexes you are interested in. (I gave her the address of a bank owned 4plex that I just found) and then they say they have all their ducks in a row to finalize our loan. My husband does not want to burn any bridges. He wants to do one deal with them. I am sure it would be a mistake.
My impression is they are going to use our money and labor and the house will be in their name and then when we sell we will get 15k. Am I missing anything else? What else do I need to ask before my husband does something silly.
Then she tells me she is looking for a new assistant and realtor and would I be interested.
Any suggestions would be appreciated.
Thanks for your consideration.
Sharon