Don’t Be A Party To Mortgage Fraud!
by Tim O’Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au
Last week I received this email:
“Tim,
I was wondering if you could help me with a strange clause. A woman wants to purchase a property for $500,000. She wants to get extra money from the banks to cover deposit, so this is what she proposes:
Contract Price: $670,000
30% deposit (deposit is not physically paid, but sellers acknowledge that the deposit has been)
Then at settlement, she pays the $500,000.
This means that the property appears to have sold for $170,000 more.
My question is whether this is legal as it seems to be misrepresenting the true contract price?
Regards,
Damien“
With no questions asked, my reply was short and sweet:
“Mate, people have gone to jail for this sort of fraudulent conduct.”
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1 Comment
Happens ALL the time on the Gold Coast with two tier marketers. They do this to get a SALE (Stamp Duty paid at the the $670k level) on the Valuer General’s database, then their TAME Valuer can come in and perform due diligence on the rest of the development, safe in the knowledge that there is a ‘sale’ on the VG’s records at $670,000 even though we know, at the first ‘mortgagee in possession sale’ it’ll fall through the floor and go under the hammer for $400k (ifyou’re lucky)