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Can I get out of a home purchase contract if I find out the contract contain ilegal information

my sister is selling her house for less than the appraised price, however, the borrower is wanting for her to claim that she is selling it for the actual appraised price.The broker is also willing to state that the difference in price is a "gift". > When she signed the contract, she was not aware that it was illegal to alter the price of the house in order to help the buyer to qualify. Both the buyer and the broker keep telling her that it is legal. Although they are able to work around loop holes to make the paperwork "legal", as Jehovah's Witnesses we cannot do things like that.I hope this all makes sense.My question is .. is there someone that can get involved and help her so that they understand clearly that she is not willing to sign anything else unless they indicate the correct sale price on the contract?
By titiyady310 from CA Aug 19th 2015

It is not illegal to change the sale price of the property. She can do an addendum to the sales price at any time. The issue may be more of an underwriting issue with the buyer's lender. Typically your loan is based on the appraised value or sales price, whichever is lower. She is not obligated to make a change on the sales price, which may cause the buyer to not qualify for his/her loan in order to buy the property. At the end of the day it is up to her. But nothing she is doing is illegal. Hope that helps

Aug 19th 2015

On the surface, what the buyer's are asking you to do is certainly unethical, and it's possibly illegal. What they are trying to do is pull one over on the underwriter. It's possible they are trying to put less than the required down payment by claiming you're giving them a gift of equity.. this would clearly be loan fraud if you have no relationship with the buyer since underwriting guidelines state there must be a relationship in order to give a gift of equity. Just like most lies, you end up lying even more to cover up the original lie. The lender will most likely require you to sign a "gift of equity" letter, and they might also ask you to write a letter of explanation detailing your relationship with the buyer.. So, yes.. this would clearly be illegal if there is no relationship.. It is true that you can change the sale price if you wish, but if your doing it to deceive the lender/underwriter, it's flat out loan fraud, and frankly, after reading your entire question, i'm surprised anyone would tell you differently.. Listen to your gut, and don't do it.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Aug 19th 2015

If they are asking you to sign a new contract at the higher price you are not obligated to sign, most lenders will not allow a new contract to come after the appraisal has come in. Therefore what they are doing will more than likely include some kind of fraud that you do not want to be a part of.

Aug 19th 2015

You need to contact a good Real Estate Lawyer in your area to advise you.

Aug 19th 2015

It is illegal and immoral. The Realtors and Lender can go to jail for this and your sister may be an accomplice. The California Association of Realtors has an ombudsman to help the public in these situations: (213) 739-7227 or send an email to ombudsman@car.org

Sep 2nd 2015

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