How’s this for a curve ball [?][?][?]
Somebody I know (not very well mind you) has been asking me for advice on property. Although I only found out yesterday that he’s triple mortiged his house and has taken out a mortage on another property which he doesn’t even own!!!
What advice would you have for him? He’s already been told that Fraud is a criminal event. The tragedy is his family is unaware of his activities and are blissfully ignorant of the fact that their Dad could go to jail and they could loose their house.
Can anyone hit a curve ball [?] Personally I wouldn’t hit this one with a 10 foot bat  way out of my league.
“small steps make the journey” (SAS)ArtyParticipant@artyJoin Date: 2003Post Count: 884
..This is when you do like the old battery commercials and “Holler for a Marshall..”..
We need to “Holler for a Steve !!..”
..if we all hold hands and chant he may appear …
Not sure if anyone has noticed how quiet some people have become on the forum… That’s probably because they are out there doing deals…LOL
Okay, well I’m doing research and trying to do my ‘Go Slow’ Mantra [:0)]
It really is a curve ball isn’t it?
“small steps make the journey” (SAS)George1Member@george1Join Date: 2003Post Count: 59
[xx(] Its distgusting that people have to “fraud” their families to make a dollar. If he is aware that “fraud” is a criminal offence and you have the facts, be upfront and tell them that you do not provide advice and if they ask why, just tell them why. If you don’t, morally it is on your head.ArtyParticipant@artyJoin Date: 2003Post Count: 884
Sooshie, its a doosie !… its bad enough trying to get back from 1 mortgage not multiple.
I cant go out and do deals… 
Im stuck at work still… but ive been spending most of my time in here, dont ya just love windows… when the boss comes past, the window drops… [8D]
I noticed that Steve put your name “Sooshie” in his book!… im gathering you two are close friends.. ?
wilandelMember@wilandelJoin Date: 2003Post Count: 761
Yes, the regulars have been a bit quiet lately!! Personally, I have been researching lots, & trying to make sure that a settlement “happens” and it can be very time consuming.
As Arty said “this one is a doosie”. Rather than him being “disgusting”, I think he is sad, and has a major problem. He needs good advice from someone, perhaps you can be a good listener for him. That may be a good starting point for him.
I wish you both luck.
He actually hasn’t ‘frauded’ his family in the real sense of the word, I don’t think he’s told them the complete story which in itself is like lying.
I feel sorry for the man, because he actually doesn’t think he’s done anything wrong  Numerous people have come to him and told him what he should do, but he seems to have this ‘victim’ mentality.
If the ATO does get him on criminal charges for ‘fixing the books’ and the banks get hold of him for fraud, he’ll probably get out of it due to mental instability.
I’ve actually just found out, since my last post, that it’s more messy than I was lead to believe.
It’s a real mess.
It’s out of my hands now.
A triple mortage on his house!!! Do you reckon he used a broker? As you put it Arty, it’s hard enough to get the 1st mortage over the line, let alone the 3rd!!!
Got to run
I’ll keep you up to date
“small steps make the journey” (SAS)TerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
How do you triple mortgage a property?
I have heard of major frauds happening and banks losing millions but not doing anything because of the possible bad publicity!
[email protected]Elysium-MMember@elysium-mJoin Date: 2003Post Count: 259
Sounds quite sad. Especially if he refuses to accept that he’s doing anything wrong. People with a “victim” mentality often seem to feel that the world owes them a favour, so they’re entitled indulge in what would otherwise be unacceptable (whether morally, ethically or legally) conduct.
Maybe he needs to know that a conviction for fraud usually carries a hefty jail term. I think the maximum is 5-7 years. I for one would not want to risk becoming Bubba’s long term beyatch in the clink. Then again, if he is thinking the way you’ve described, he’ll probably convince himself that he’s innocent and will never be convicted.
Alternatively, if he cares for his family, maybe he needs to realise that if even one of the banks cottons on, it’s all over (unless the 3 mortgages were slapped on with the consent and knowledge of all the banks) and his entire family is going to get tossed out on the streets – wife will be humiliated and kids don’t want to show their faces in school.
I hope this has a happy ending.
P.S. technically, you could have a legitimate triple mortgage, with each mortgage having a different ranking priority. But practically, why would you? If you could borrow the money from three banks, why not just borrow it from the one?Kirby319Member@kirby319Join Date: 2003Post Count: 120
How can you mortgage a house three times without each bank knowing?
The title will reflect the interest of each bank surely.picja1Member@picja1Join Date: 2003Post Count: 144
Are you sure the 3 mortgages are from banks?
I’ve had a client wanting to refinance 3 mortgages down to one. The way it was, was
1st Mortgage to a bank
2nd Mortgage to another company, not a bank, who specialize in 2nd mortgages.
3rd Mortgage to another company, not a bank, who will lend to nearly anyone.
The total of the mortgages only added up to 90%LVR, but the interest rates on the 2nd and 3rd were quite high. He was self employed and could only get the 1st mortgage at 80%LVR, the second to 85%LVR and the third to 90%Lvr.
No doubt after consolidating into one, he probably went and did it again. But what can you do.
I’d just say, these are the facts(such and such), regardless of what you believe or feel, these are the facts. Also, you should tell your family as soon as possible. If you don’t take this seriously, See Ya.
YEP!!! All 3 mortages are with different banks.
Totalling more that 1 million buckaroos  This is NO joke.
Having a triple mortage can be done legally
For example (please remember I’m not the Queen of Numbers)
original mortage on example PPOR is 130K, house market value 150K (i.e. 1990)
2nd Mortage extra 100K on house after price value jumps to 250K (1996)
3rd Mortage of another 150K on house after price valuation is 350K (2002)
(Hope I’ve illustrated this example right)
Apparantly he’d involved some people without their knowledge and when they found out they went to him and asked him to remove their names from his list, he refused. He could inform the authorities via an affadavit to clear them of any culpability, but he refuses to do so, because that would be acknowledging he’s done something wrong.
It’s a real tragedy
If he is sick (which I’m starting to think he is) then really his capacity for understanding the gravity of the situation is diminished. He’s painted a fairytale picture and now believes his painting has come to life. The ugly trolls are all those people who’ve been giving him advice and trying to maintain his dignity, but in his mind they are out to decieve him 
I’m sure you will all be reading about this in the paper soon. I guess I’m sharing this with you all, because I’d genuinely like to help, so I’m canvassing ideas. I’m keeping names, numbers, areas etc confidential for obvious reasons. I don’t know if I can help though [?][?][?] The only way to appease the banks is to pay the debt owed. Money is required to do that. In this case lots of it.
He should have stuck to what he knew how to do best – teaching children. Children love him.
I’d like to see him apologize to the people he’s hurt (although having spoken to them and listened to them inform me of their plight, they consider it too late for that. Personaly, I never think it’s too late to say sorry if you truly mean it) but if he thinks he did nothing wrong, why would he apologize?
He’s spun a web for himself ,yet he sees himself as the fly caught in the middle. He is definitely in denial.
I’m acquainted with his wife informally, but we share some friends. His wife will be protected and kept in the manner she is used to, but she’ll be hurt from the web of lies he’s spun.
So, when he called me and left a message to speak to me about “things”. I did call back, but I’m not sure he wants to talk about what he’s done, I’m thinking he wants me to come up with an idea on how to get out of this situation.
Anyone know what a Tasmanian Devil does when it’s leg gets caught in a trap?
Not a pretty sight.
Please anyone, give me some good news. Even if he could approach a 4th lender and get another mortage covering the entire amount at an exorbitant amount of interest…I know it’s wishful thinking.
My thinking cap is running full speed
I wish I had a magic wand somedays.
Can you imagine me the Wish Fairy ([:0)])
On that thought I’ll end this post.
“small steps make the journey” (SAS)MelanieMember@melanieJoin Date: 2003Post Count: 382
Oh Sooshie, want an unhappy mess 
What is his income stream? Is there some way that a lender would be happy to take first dibs at his income, pre-banking in his account, to take over the whole fiasco?
Only thing I can think of so far – will ask around though.
MelElysium-MMember@elysium-mJoin Date: 2003Post Count: 259
It looks like he may have to hire a bankruptcy expert (many medium and small accounting firms have such people, and other practice in their own outfits – look under insolvency practitioners in the Yellow Pages) and try to come to a formal arrangement with his creditors (the formal name varies between states). It’s not bankruptcy, so he saves face, but it is still recorded against his credit rating. The benefit is that it gives him some degree of protection against creditors who then cannot sue him for payment of the full amount owing up front, but have to accept payment by instalments. If his situation is really dire, they may even be forced to accept less than 100 cents in the dollar, because the alternative would be that they get substantially less.
Of course, it’s still a black mark against his credit rating, and he’ll find it hard to ever borrow money again, but maybe this is a good thing.
The other problem is him – if he refuses to accept that there’s a problem, he may refuse to accept any such help. However, businesses and companies go to these people all the time when they hit the wall, because getting out of the [email protected] is better than going bust.
All the best.
MHaroldMember@haroldJoin Date: 2003Post Count: 80
As an almost lawyer, my strategy for the situation would be:
-Basically, he has got to take ownership of this problem, that way he can also take ownership of his defense of the problem. At best case, he can make himself the victim
-Legally, this means he needs to own up (quickly) and with the same breath declare himself mentally deficient or some other mitigation mechanism.
At this rate, this guy will be found out. Once that occurs he loses control of the issue and his legal outcome will be totally out of his hands.
Unfortunately, Sooshie, you can be part of this solution. You could empower his family to hire the lawyer who could go to work. Otherwise, he is gone and his family will be a lot worse than if they embrace the problem now.lynnemMember@lynnemJoin Date: 2003Post Count: 21
l think he may have fallen into the trap that so many get rich quick schemes sell[and we have all read them]use other peoples money!!!l pesonally l think this is a wake up call for all.there is so many lenders out there and property is the flavour of the month that even the lenders are not doing their due diligence. the responsibility lies with ones self in the end.sadley the lenders will not loose as they will cover their buts.there will just be one very busted family left in the end.BUYER BEWARE? BORROWER BEWARE!!!! KNOWLEDGE IS POWER.don.t ever think someone else is better qualified to handle your future THAN YOU ARE. cheers lynnemLeighMember@leighJoin Date: 2003Post Count: 130
I think you’ve actually got a fast ball here, and it’s not aimed over the plate…!
I believe we should all take responsibilty for our own actions. Declaring bankruptcy is not taking responsibilty, rather shifting it onto the shoulders of others. The shoulders of people like property investors who at the end of the day pay for *John Doe’s* mistakes through higher bank fees.
What has this person spent the money on? Has he blown it gambling, funding a lifestyle, or does he actually have something to show for it, i.e a nice car and a boat?!
My suggestion would be to encourage him to sell off as many doodads and unused ownings as possible, downgrade both his lifestyle and essential personal assets like cars, and if possible increase his earnings.
Hopefully doing this may be able to pay out the lesser of the 3 mortgages upfront, and if he keeps up the original payments (sum of all 3 mortgage payments combined) then he’ll be well on his way to terminating the debts. He may also be able to consolidate once the 3rd is out of the way.
I’m assuming the debt is currently being serviced or the banks would be taking action already?
Also try offering him John Burley’s book ‘7 steps to successful investing’ I think is the title. It has some great information on minimising consumer spending and eliminating debt. Even the Millionair Next Door could be a good suggestion, take the approach of educating him rather than punishing him, he may suddenly see the light and will be much more willing to change if he feels he has found the solution. He may even go forward rather than backwards with this kind of approach, he obviously has the dream to succeed.
“If you can count your money, you don’t have a billion dollars”
J. Paul Getty
I’m reading your posts and you’ve given me a lot to think on. It’s so so so MESSY!
M hit the nail on the head with this
The other problem is him – if he refuses to accept that there’s a problem, he may refuse to accept any such help
I think he’s suffered a meltdown from all the pressure 
His only assests are his family. He’s got no job (since forclosure on business – liquidation), not many supporters and his house is triple mortaged.
I’m going to re-read all your posts again, in the morning when I’m sleepsober and get back to you.
“small steps make the journey” (SAS)brianhcParticipant@brianhcJoin Date: 2003Post Count: 62
Sorry, I don’t get it. From your example he would seem to have mortgaged the property for more than its full valuation, unless he had paid down some of the principle on the earlier mortgages?
As all mortgages interests are noted on the title, how did he manage this? The mortgages may be from different banks, but they will have each searched the title for prior mortgages. So presumably the third bank went in ‘with their eyes open’? So I am not sure where the fraud lies (apart from mortgaging the property he doesn’t own).
If the mortgages are higher than the value of the property, his best bet is to sell the property now himself, rather than one of the banks foreclose. That way he can get best price and retire as much of the debt as possible.
Then he can rent, pay off his liabilities over time, and hopefully recover his position eventually. Of course this all requires him to take personal responsibility, which doesn’t seem hopeful based on your posts. Good luck.
CheersHaroldMember@haroldJoin Date: 2003Post Count: 80
Gees guys, he is not an investor. He’s a criminal
As if he can “retire debt” and improve the situation. He’s committed fraud on someone elses house as well. He is gone right now.
The best outcome:
He gets a two year prison sentence in a minimum security prison farm
The worst outcome:
He keeps going, totally ruins his family, commits suicide (sorry but its possible), or he gets a substantial prison term accompanied by a very embarrising trial
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