Under section 697.08, F.S., equity skimming is defined as “purchasing, within a 3-year period, two or more single-family dwellings, two-family dwellings, three-family dwellings or four-family dwellings (or a combination of those) that are subject to a loan that is in default at the time of purchase or within 1 year ...
The Florida Legislature has provided that equity skimming is a third degree felony. A person convicted of a third degree felony may be subject to imprisonment of up to five (5) years and a $5,000 fine.
Equity Skimming is a Mortgage Fraud committed by skimming the equity from a property as part of subprime lending refinancing. This fraud occurs when a homeowner who is in default on their real estate taxes or mortgage is offered a loan to prevent immediate foreclosure.
Two warning signs of equity skimming are as follows: The prospective buyer agrees to buy the home right away and without giving the property a thorough look; and. The prospective buyer does not put any money down but rather, hands you a piece of paper that, in so many words, says, “I.O.U.”
Consequences of Equity Skimming
Equity skimming can lead to legal consequences, which may include: Civil damages for losses caused to the homeowner. Criminal fraud charges.
As long as it is done correctly, property flipping is entirely legal. In fact, a person can earn a decent and legal living through the practice of property flipping. However, there is one major concern and that is the fact that property flipping entails considerable financial risks.
Equity stripping makes you less desirable to sue because you appear to have less than you actually do. Some investors wonder if this is ethical or even legal. The answer is yes, provided you set everything up before a creditor or lawsuit comes your way.
Before a mortgage is filed on the property, it must be signed by a representative from the lender and the borrowers. There is also a place for someone to sign as a witness to the transaction. Anyone whose name is on the deed must sign the mortgage. Your spouse must sign even if they are not on the mortgage.
A straw buyer, or straw purchaser, is a person who purchases on behalf of another person. ... However, the act of using a straw purchaser is considered illegal where the transaction involves fraud or purchasing goods for someone who is legally barred from making the purchase themselves.
An inflated loan appraisal determines an asking price that is much higher than the market value of the home. An over-inflated appraisal is a type of mortgage fraud that could cause a buyer to pay much more for a home than they should.
Punishment for a California felony can include a fine. Sometimes the fine is set forth in the statute defining the crime. Where the amount is not specified, the judge can impose a fine of up to $10,000.
(f) An administrative fine of up to $1,000 per day, but not to exceed $25,000 cumulatively, for each day that: 1. A mortgage broker or mortgage lender conducts business at an unlicensed branch office. 2.
Terms in this set (100) What is the regulatory authority in the state of Florida and what is it responsible for? The OFR ( The Office of Financial Regulation) AKA The Office.
Fines for designated crimes and for noncriminal violations shall not exceed: (a) $15,000, when the conviction is of a life felony. (b) $10,000, when the conviction is of a felony of the first or second degree. (c) $5,000, when the conviction is of a felony of the third degree.
Loan Flipping Loan flipping is the practice of repeatedly refinancing a mortgage loan without benefit to the borrower, in order to profit from high origination fees, closing costs, points, prepayment penalties and other charges, steadily eroding the borrower's equity in his or her home.
(7) In addition to a sentence otherwise authorized by law, a person convicted of an aggravated white collar crime may pay a fine of $500,000 or double the value of the pecuniary gain or loss, whichever is greater.
If the mortgage goes into default or is foreclosed, it will be reported under the straw borrower's name and his credit will be ruined. Misrepresentation of identity on a federally related mortgage transaction is a criminal offense punishable by up to 30 years imprisonment.
An illegal firearm purchase (straw purchase) is a federal crime. An illegal firearm purchase can bring a felony conviction sentence of ten years in jail and a fine of up to $250,000. Buying a gun for someone who can't can cost you your good name and land you in big trouble.
A second mortgage is an additional mortgage on one piece of property. It is considered “silent” if that second mortgage or loan is used to secure down payment funds and then not disclosed to the original mortgage lender prior to closing.
A first lien has a higher priority than other liens and gets first crack at the sale proceeds. If any sale proceeds are left after the first lien is paid in full, the excess proceeds go to the second lien—like a second-mortgage lender or judgment creditor—until that lien is paid off, and so on.
The most common documents are related to mortgages, deeds, easements, foreclosures, estoppels, leases, licenses, and fees, among other kinds of documents. The most important real estate documents list ownership, encumbrances, and lien priority. These are used to maintain proper real estate transactions.
Defaulting on a home equity loan or HELOC could result in foreclosure. ... If you have equity in your home, your lender will likely initiate foreclosure, because it has a decent chance of recovering some of its money after the first mortgage is paid off.
Even if a HELOC was never used, it is still a lien on the property. ... If there is no monthly payment due, the HELOC lender does not send a monthly statement, so it is possible to have never used a HELOC, never received a bill, but still need to close the account and obtain a release.
Equity Stripping is a set of strategies designed to reduce overall equity in a property. Equity stripping strategies can be used by debtors as means of making properties unattractive to creditors, as well as by predatory lenders looking to take advantage of homeowners facing foreclosure.