Opportunity? Very Suspicious - Help
A friend presented me with an opportunity through a mortgage company/investment group that sounds great but perhaps too good to be true. I will try to explain this proposed process as much as possible to my knowledge.
We are to get our mortgage refinanced.
Upon doing so, we pay this particular company 3,000 dollars. This company then (by some means I am unsure of) assumes the note and we make our monthly payments to them.
We are to make monthly payments for one year. When that year is up...the house is supposedly "paid for". We no longer make house payments. We have been told that if we were to sell the house then we would receive the total money from the sell of the home.
My memory is fuzzy but I was told that during the course of the yr long payments to them + the $3000 up front that this company would be investing in "whatever" and ultimately makes their money even after the year/sell of the house.
I really need some info/recommendations as I have yet to find any info pertaining to this in my searches.
Thanks!
What's the purchase price of your house, $5,000?
It sounds fishy to me, but then again I have never heard of such a program. I don't know the purchase price you are talking about or if you are talking about "normal" mortgage payments or some inflated payment process. I also don't know the LTV ratio of the house, but in my area with a standard 20% down I don't see how that is possible.
I would have any and all documents related to this reviewed by an attorney, that's for sure. I would also review the wording of the contract as to why you are paying them $3,000.
What if their investing fails, is the deal off? just a thought.
what is the name of the mortgage company/investment group.
has your friend provided proof that it works yet? If you asked for that, did you get a response of secrecy or hidden agendas.
let us know
Our home was originally purchased for roughly 115,000. We have been living in it for 3 yrs.
According to their plan...
we are to get the house refinanced (thru them with a lender) for the lowest possible rate, etc. I even recall there being a particular type of payment (interest only or vice versa).
For some reason, after the home has been refinanced we are to go through the process again - only this time directly with this group.
It is then that we pay the cash amount mentioned above and begin the monthly payments for a year.
Again, when we have reached to end of the year - the house is purportedly ours to sell (and receive that money) or continue living in the house minus the payments.
I will most definitely have an attorney look everything over. I just haven't been able to find anything on the net on this particular case and am leery as I have a family I really don't want joining me on the street should this be some form of fraud.
To me the numbers just don't add up to make something like this work. You need to be careful of unscrupulous lenders.
I had a Hard Money lender one time have his office start refusing payments as not deliverable and then would try to charge me default interest on the loan. When it happend a 2nd time he tried to foreclose on my property as the appreciation had gone through the roof on my property and he wanted my property.
He was trying to foreclose on my for bogus reasons. Well needless to say after a short legal battle the foreclosure was stopped and he resumed taking payments until he was paid off.
I personally would steer clear of this until it is proven. What have you hurt to make your normal payments for a couple years and then check back with them to see if they are still around and in business and have done this a 100 times before?
I personally wouldn't risk it. Now if I had a crappy rental house around that I didn't care if I lost it or not, I might consider doing it as a test
Goblin,
this makes no sense whatsoever, at least with the info you have provided.
Well, I don't really understand it all myself.
From what I have been told, the money this company makes off investing my cash (3,000 + 12 monthly payments) somehow enables them to do this.
Somehow, they are saying that they basically will have my house paid off in a year. I don't know how this can be.
If this is so confusing, just don't do it. Why go through this convoluted process to refinance your house. Why can't you go through the normal process of refinancing your house?
Yes it is confusing and I am only trying to make sense of it. The only reason I continue to trudge through this convoluted mess is the potential opportunity it poses should I (with this group and other's help) determine whether or not it is legitimate.
To add to the description of this process and throw out a couple of things I deem as big warning flags:
Supposedly, when this process is to actually begin taking place....I am to sign some form of confidentiality contract - I guess they want me signing something stating that I cannot mention the process to anyone.
The second and most puzzling:
At some point during the beginning stages of the process, it has been mentioned that I would take some kind of test (I believe online??? not sure). Apparently, taking this test somehow allows them to operate under the guise of a non-profit organization.
Anyone have any thoughts or ideas on what this could be?
Thanks!
My thoughts on this is that it is a total load of crap. There is no way you can pay about $3,000 and get a 115K house in 1 year! If by some miracle they could invest in something that had that return why would they need $3k from you?? If they did it just once they would have thousands in seed money to continue doing it. "If it sounds to good to be true it is...or its illegal. Since your in Texas they could be taking the $3,000 to use to smuggle in some rich Mexicans or other foreigners and then getting paid! after they are in the country.... I would run away!! its really no different than those emails going around trying to get people to give $ in order to share in a to move of $26 million from Nigeria.....
from the info you have given, "don't tell anyone" "115k mortage paid in a yr." "signing to make it look like something its not", it's a 'scam" report them........km
I get that feeling too.
Would anyone out here happen to know why a company would mask themselves as a non-profit org?
What would the reasoning be behind this?
Well non-profit is like being a church. Go down to your local church and look at all the money they rack in every week from tithing and it is all TAX FREE. That is the biggest incentive for being classified as a non-profit.
It sounds fishy to say the least!! Call you state Attorney's General Office. You may also want to contact the FTC (Federal Trade Commission) to see if you can dig anything up there.
3k into 100k in 12 months? Come on! Be reasonable here! That would be over 33 X'S your original investment! Highly Unlikely. Sounds like the broker is trying to get some extra $$$ in their pockets in exchange for you doing an Intrest Only loan. Stay away from this scam.
[addsig]
Is mortgage elimination a scam or legitimate?
Answer by anonymous contributed on October 11, 2003, at 05:12am. Last updated on October 11, 2003, at 09:30am.
At http://www.occ.treas.gov/altlst03.htm this is posted.
Alert 2003-12
ALERT
Subject: Illegal Financial Activity
Description: Fictitious Debt Elimination Schemes
Date: October 1, 2003
TO: Chief Executive Officers of All National Banks; All State Banking Authorities; Chairman, Board of Governors of the Federal Reserve System; Chairman, Federal Deposit Insurance Corporation; Conference of State Bank Supervisors; Deputy Comptrollers (districts); Assistant Deputy Comptrollers; District Counsel and All Examining Personnel
RE: Debt Elimination Schemes using Fictitious or Worthless Bonds, Due Bills and Bills of Exchange
Please be advised that worthless instruments entitled Bond for Discharge of Debt, Bill of Exchange, Due Bill, Redemption Certificate, or other similarly titled documents continue to be presented to financial institutions, mortgage companies, credit card issuers, and retail establishments throughout the United States in an effort to eliminate legitimate debts. Many of these schemes are premised on baseless or fraudulent claims against the United States Treasury, the Secretary of the Treasury, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Internal Revenue Service, or other federal or state agencies. (See also OCC Alert 2003-7 and OCC Alert 99-10).
Regardless of how such instruments or documents are titled or whether they appear authentic, they are worthless, have no legal validity, and are not payable through the United States Treasury, the Secretary of the Treasury, the Comptroller of the Currency, or any other federal or state agency. The OCC is aware of the following organizations and Web sites promoting these fraudulent schemes:
America s Advantage
www.eliminatemortgages.com
www.goodbyemortgages.com
www.mortgageelimination.net
www.the7thfire.com
Financial Dynamics
www.remedywithredemption.com
The creation and presentment of these fictitious instruments may be a violation of Title 18, Section 514, Fictitious Obligations, or other federal criminal statutes, and any person(s) using such fictitious instruments with the intent to discharge valid debts may be subject to criminal prosecution.
If a fraudulent document such as those described above is presented to your financial institution, do not return it. Instead, retain the document and file a Suspicious Activity Report. Deliver the instrument and a copy of the SAR to the local office of the Federal Bureau of Investigation.
Please direct any questions or provide further information to the attention of the OCC at:
E-mail: **Please See My Profile**
Mail: Office of the Comptroller of the Currency
Enforcement & Compliance Division, MS 8-10
250 E Street, SW, Washington, DC 20219
Telephone: (202) 874-4800
Fax: (202) 874-5301
Internet: http://www.occ.treas.gov
Brian C. McCormally
Director
Enforcement & Compliance Division
You keep asking why and the reply is because someone is a crook.
The easiest way to get right to the bottom of this is VERY FIRMLY tell your contact that your attorney will be contacting them to get further details and all dealings will be handled through your attorney. At that point, I'm sure 'something' will change, probably the fact that they won't contact you again or will try to tell you an outside attorney can't be involved.
Then, if you still think there is some merit to this, step aside, hire an attorney to represent you and come back in a year and tell us all what idiots we were because it worked.
I believe that is part (interest only loan) of the process they are stating. To pay on an interest only loan for one year. Saying that, where does that lead? I am just curious if there is some type of "setup" in doing so. I just find myself now interested in the possible schemes that go along with this proposal.
Quote:
On 2004-11-29 18:39, astcptlmgmnt wrote:
3k into 100k in 12 months? Come on! Be reasonable here! That would be over 33 X'S your original investment! Highly Unlikely. Sounds like the broker is trying to get some extra $$$ in their pockets in exchange for you doing an Intrest Only loan. Stay away from this scam.
interest only loans will NEVER get your mortgage paid off. you pay interest only, no principal, hence, the name, interest only. that means, in one year you will be EXACTLY where you are today. "real' interest only loans are set up that way for a few years and then convert to another type loan - either with a balloon payment that requires refinancing or else convert to a regular loan w/payments of principal & interest.
I just read something about this process in t he Seattle times a couple Sundays ago. It was under the "don't fall for this scam" section. I didn't read it that closely because I just thought, "DUH!". I don't remember the exact process, but I think it involved a shady title company that would trick the lender into thinking it was paid off, or it involved a type of title insurance fraud that pays the lender off in full or at a discount. The fee is usually higher than $3k I think it said, too. Closer to $5k when all is said and done. Either way, I would stay away from it!
If you haven't already seen the post... look at 'Dorian Mortgage Elimination Scam' on the next page of topics. Looks like your topic answer.
If a deal seems like it's too good to be true-it probally is..
Check with your local Better Business Bureau and see if they are mentioned at all... Ask for all this in writting and take that writing to an attorney. Make sure it's a real estate attorney.
This process, as described, is a tough sell - I don't buy it!
If these people could turn 3,000 + 12 months of payments into $115,000 in a year then I would think they would be doing it with investors money, not through refinancing a mortgage - that just further complicates the matter...
Good Luck - Do research!
[addsig]