Asked by anthony lim
Can seller and purchaser agree on an inflated caveat price to increase the valuation so that 60% LTV value is still achievable for a cash strapped buyer?
It benefits the seller (gets property sold), benefits the bank (get bigger loan deal), benefits purchaser (gets the property)...
EXAMPLE: $1M property, by right require payment up front of $400K at limit of 60% LTV $600K loan ... but purchaser only have $200K.... so inflate the caveat lodge to $1.33M to get a $800K loan, real deal is still $1M, so purchaser still get his $1M property with his $200K upfront. Fake the reported price like buying a car with "overtrade", get bigger loan than allowed.
It benefits the seller (gets property sold), benefits the bank (get bigger loan deal), benefits purchaser (gets the property)...
EXAMPLE: $1M property, by right require payment up front of $400K at limit of 60% LTV $600K loan ... but purchaser only have $200K.... so inflate the caveat lodge to $1.33M to get a $800K loan, real deal is still $1M, so purchaser still get his $1M property with his $200K upfront. Fake the reported price like buying a car with "overtrade", get bigger loan than allowed.
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