Scam or Option?
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Scam or Option?
| Tue, 04-07-2009 - 10:46am |
I am teaching a group of younger people (late twenties) and they were talking about financial
| Tue, 04-07-2009 - 10:46am |
I am teaching a group of younger people (late twenties) and they were talking about financial
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I'm shocked! Why would someone do that? I'm just thinking about our situation. We're trying to get our credit cleaned up so we can move closer to DH's job. The thing is that even with the housing prices being so low, we *need* to sell our house before we buy a new one so we can have a down payment so we can afford a mortgage on another house. We can't afford two mortgage payments even for a few months. And where are they getting these leases? Are they actually leasing to people or are they forging them? If they're actually renting to people to they just let them get kicked out of their home when the bank forecloses?
I think it's crazy, but I imagine it could work for some people. You don't need a FICO score if you don't plan on ever needing to borrow money. I certainly hope to one day be at a point where I don't have to borrow money, but I'm not there yet and don't expect to be for a while. I can totally see people doing this and instead of saving all that extra money spend it frivolously and then when it comes time to buy a new car or they get relocated, they're out of luck.
It sounds like a really BAD idea to me.
I would say it is awfully smart of these young people to take advantage of the situation!
There is a huge difference btw this type of fraud and bankruptcy. The issue is intent. It's the difference between getting into a car accident where someone is hurt, and intentionally driving into someone. Only one of those is a crime. Intent makes a big difference.
Most people who declare bankruptcy had a serious illness or long layoff that pushed them into bankruptcy. Having the misfortune of getting cancer and becoming unemployed is a far cry from fraud.
But, I do admit to having a bit of a hard time with the "gray area" people who should have known better when it came to their finances. The median income in my county is less than 50K, and at the height of the bubble the median home price was 400K. If you make 50K you cant afford a house that costs 400K. Period. The people who bought in those circumstances should have known better. Their ignorance is costing the rest of us a lot of money. It's not fraud, but I dont consider many of them to be innocent bystanders, either.
Thank you for making the distinction and clarifying bankruptcy.
I just checked the DOJ stats on fraud.
"Nevertheless, buying another property while proving an existing property is leased is very normal, not fraudulent, nor a scam."
Of course, it's not and I don't see anything wrong with someone doing that. But if you have a phony lease, it is fraud. And if you go into it with every intention of defaulting on the first loan, it is. It might be hard to prove, but IMO, it's still fraud.
Alright, now that my work computer ate my last post... let me try this again.
Carolyn, from what you are describing and have done, countless others have done for decades.
That's the problem with intent.
Continued to play the devil ...
Not arguing with you that most people who filed bankruptcy had no intention of doing so.
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