I am dealing a man who lied on his mortgage application to obtain a property. He got one of these no doc loans and said his monthly income was 7k+when in actually it was $600. The seller, appraiser, and mortgage broker were all in on it. He got kicked back 20k cash on the loan and never made a payment. The property is worth much less than the apprised/ sale price
Now I have submitted all of his short sale paperwork and the lender sees that he truly only makes $600 per month. They were the ones who told me he claimed 7k+ per month.
My question is how do lenders normally deal with this type of situation? Will they short or want to punish the H.O.?
I’m sure they won’t do anything about it. Too many “arms” of the mortgage company. It is a shame people do that though, although it does happen every day.