Is it a crime to with hold info from your lender? (sale, real estate)

[REdudeFla]

Hi, I was wondering if it is considered mortgage fraud to withhold information about a deal or property from your mortgage lender? For instance, what if you discovered there was a termite issue that was addressed by previous owner, but the current owner/seller may not know about it. If the lender finds out that you knew about it, could they say it is mortgage fraud?

[tinytrump]

that's why you do a HOME Inspection- if not you buy as is- now if crimes etc have been committed in the property I think the agents runs a quick-aroo to see if anything is amiss, like it was a a meth lab for the drug cartels! the title co's run the deed history--
The seller might have moved away and vandals removed stuff or works of nature as a lighting strike that only wiped out some electrical ? or the rats ate the wires? Home inspection!

[REdudeFla]

Um, thanks, but that really doesn't answer the question. Let's put it this way, is withholding information from a lender a crime/fraud? Your answer: Home Inspection! Does that make sense to you? It doesn't to me. I understand you are trying to be helpful, but the answer doesn't help.

So, is withholding information from a lender fraud/crime? For example, if sellers disclosure says there has never been a termite issue, but I find out that there has been one and do not tell the lender, if the lender finds out, is it fraud or a crime?

Thanks

[tinytrump]

How Florida Sellers Must Make Disclosures to Prospective Home Buyers

Florida law provides that, with some exceptions, you (as a home seller) must disclose any facts or conditions about your property that have a substantial impact on its value or desirability, and that others cannot easily see for themselves (This comes from the court case of Johnson v. Davis, 480 So.2d 625 (Fla. 1985)).
To assist sellers in making all relevant disclosures, the Florida Association of Realtors® provides a standard form, which covers many common property characteristics about which buyers want to know. (This is separate from the standard contract that is used in most residential real estate transactions to bring about the purchase and sale of the home.)
The categories covered on the standard Florida disclosure form include, for example:

• whether any actual or potential claims, complaints or court proceedings affect the property
• whether the property is subject to the rules of a condominium or condominium association
• whether any disputes have arisen regarding the property’s boundaries
• whether the property contains any past or present sinkholes (a frequent hazard in Florida)
• whether the property contains any environmental hazards such as asbestos, lead, mold, Chinese drywall (another hot-button problem in Florida), and others
• whether any infestations or damage have occurred from wood-destroying organisms such as termites and carpenter ants, and
• whether there are any problems with essential components of the home, such as the roof, plumbing, electrical wiring, major appliances, HVAC, and more.

Some sources claim that, as a seller, you may make disclosures either verbally or in writing. Florida law does not definitively direct sellers either way. However, if you make oral disclosures without any written confirmation, you may have a difficult time proving later that you made them, which is especially problematic if the buyer purchases the property and later finds problems with the home. As a common sense and good business practice measure, it is best to make your property disclosures in writing.
lorida Home Sellers Need Only Disclose What They Know About

Don’t worry that you will be expected to know or learn about and disclose every minute detail of your home’s condition. As the seller of a home in Florida, you have the benefit of laws declaring that you will not be held responsible for property defects of which you have no actual knowledge. (This comes from the court case of Jensen v. Bailey, 76 So.3d 980 (Fla. 2nd DCA 2011).)
If you sell a Florida property, and the buyer later claims in court to have discovered a defect that you did not properly disclose, that buyer must be able to demonstrate that:

• You knew about the property defect.
• The defect has a substantial impact on the value of the property.
• The buyer did not, upon purchase, know about the defect.
• The defect would not have been easy for the buyer to detect.
• You did not tell the buyer about the defect

Florida Home Sellers Are Not Responsible for Defects They “Should Have Known” About

Florida homeowners are required to disclose only those property defects of which they have actual knowledge.
For example, in the Jensen case mentioned above, the sellers had stated in their written disclosures that no additions or alterations to the property violated building codes. After the purchasers moved in, however, they discovered that several alterations made to the master bath, kitchen, and bedroom did not comply with building codes. The buyers sued. The court ruled for the sellers, finding that they didn’t apparently know about the violations, having (like many homeowners) left compliance matters to their contractors.
As in the above case, Florida courts have attempted to protect home sellers from fear of being sued every time they sell their properties. Sellers in Florida are not expected to guarantee to buyers that their properties are defect-free, which would be an impossible promise to make in most cases.
Facts About the Property That Sellers Need Not Disclose

There are a number of property conditions that Florida sellers (and their agents) are not required to disclose, no matter how unappealing these may be to some buyers. As a Florida seller you are not (under (Fla. Stat. § 689.25) required to disclose:

• that the property has been inhabited by a person infected with HIV or AIDS, or
• that a murder or suicide has occurred or is suspected to have occurred on the property.

You are fortunate to have the benefit of this law, as these conditions might very well be a dealbreaker for some buyers, or a basis for them to demand a drastic reduction in your asking price.
But what if the buyer asks about these issues? Florida law merely states that you are not required to disclose these conditions, and does not indicate how you should answer if asked. As a practical matter, silence (for example, “The law does not require me to disclose such information”) is probably the best policy; or honesty if it won’t impact the privacy of previous inhabitants. If a buyer asks and you make a misleading or false statement, the buyer might seek legal relief against you on such grounds as misrepresentation.


all that to say it would be a civil case not a criminal.

[REdudeFla]

Dude, i see reading comphrehension wasn't your strong suit at school, huh? No one is talking about the sellers responsibilities. Hypothetically speaking, It's quite possible the seller doesn't know and has never known anything about a termite issue.

The issue is between me, the buyer, and the lender.

My question is (for like the third or fourth time) IF I, the buyer, find out about an issue and decide not to disclose it to the lender even though I am contractually obligated to disclose it, is that fraud or a crime? As I understand it, artificially inflating the price of a home for whatever reason can be construed as fraud. Not sure if this issue applies, but I am just curious.

Thanks

[WellShoneMoon]

Originally Posted by REdudeFla

Dude, i see reading comphrehension wasn't your strong suit at school, huh? No one is talking about the sellers responsibilities. Hypothetically speaking, It's quite possible the seller doesn't know and has never known anything about a termite issue.

The issue is between me, the buyer, and the lender.

My question is (for like the third or fourth time) IF I, the buyer, find out about an issue and decide not to disclose it to the lender even though I am contractually obligated to disclose it, is that fraud or a crime? As I understand it, artificially inflating the price of a home for whatever reason can be construed as fraud. Not sure if this issue applies, but I am just curious.

Thanks

You admit that you are contractually obligated to disclose it. That being the case, not disclosing it would be breach of contract. The lender would have whatever remedies the contract provides, in the event of breach.

As for your question regarding mortgage fraud, there isn't nearly enough information to answer that question.

[WellShoneMoon]

Here's a Florida statute about mortgage fraud. There may be others.

Statutes & Constitution :View Statutes : Online Sunshine

[bmw335xi]

Originally Posted by REdudeFla

Hi, I was wondering if it is considered mortgage fraud to withhold information about a deal or property from your mortgage lender? For instance, what if you discovered there was a termite issue that was addressed by previous owner, but the current owner/seller may not know about it. If the lender finds out that you knew about it, could they say it is mortgage fraud?

Punishable up to $3.2 billion and up to but not exceeding 83 1/2 years in Federal prison

[REdudeFla]

WellShoneMoon, thanks for the link. Thanks bmw for the info.

I know the contractual obligations, but I am wondering if something like that would be considered fraud or just looked at as something minor. I suppose I ask because I don't see how something like a former termite issue which has been remedied could affect the price of the home, and therefore be considered fraud. I guess for now I would say yes it is fraud, though I doubt it would be taken too seriously.

Moving forward, is it unethical for a real estate agent to encourage a buyer to not disclose such information? Is that something that is looked at seriously (license loss, job loss, etc.) or something that would be looked at as minor and in bad taste, with little consequences.

Thanks for the responses.

[tinytrump]

Can You Sue a Florida Real Estate Agent for Fraud and Can You Recover Punitive Damages? | AboutFloridaLaw.com

In Florida, if you have been the victim of an unscrupulous real estate agent or broker, you can do two things: one, you can file an official complaint with Florida Real Estate Commission; and second, you can file a civil lawsuit seeking damages for the losses that you have incurred as a result of the agent or realtor’s wrongdoing. - See more at: Can You Sue a Florida Real Estate Agent for Fraud and Can You Recover Punitive Damages? | AboutFloridaLaw.com
n Florida, if you have been the victim of an unscrupulous real estate agent or broker, you can do two things: one, you can file an official complaint with Florida Real Estate Commission; and second, you can file a civil lawsuit seeking damages for the losses that you have incurred as a result of the agent or realtor’s wrongdoing. - See more at: [url=http://aboutfloridalaw.com/2014/05/27/can-you-sue-a-florida-real-estate-agent-for-fraud/#sthash.ixZIYK6z.dpuf]Can You Sue a Florida Real Estate Agent for Fraud and Can You Recover Punitive Damages? | AboutFloridaLaw.com[/url