The Glade 4.0

If the bank is satisfied with a single month lease then go for it. I'd bet it ain't gonna happen though, kind of defeats the purpose for the bank.

Regarding all the other subterfuge, sorry, but it is their business. Literally and figuratively.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

It's only fraud if you misrepresent the truth.

If the rent is actually $1200, and that is what they pay you, but you have an agreement with them to rent ...well, anything (a scarf, a beer glass, it doesn't matter) from them for $200 a month...you don't need to tell the bank about the latter. They didn't ask and it's not related to anything they are asking.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Taly, what you are suggesting falls under the classic definition of mortgage fraud. If you omit information or materially misrepresent information in an attempt to secure a mortgage (or a larger mortgage) that you couldn't get if the lender knew that information, you are committing mortgage fraud. It is obvious what the lender's intent is when they require a lease for X amount of money, if you go through hoops in order to hide the actual amount received in compensation for the use of the house, it's fraud. No matter how you try to disguise it, the intent is there to defraud the lender on the mortgage application in order to obtain a loan for which they otherwise wouldn't qualify.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

I guess my concern would be that if the bank wants to see $1200/mo it is because they examined the owner's finances and saw that is what is needed to stay afloat. By paying $1000 a month they might fall behind, bank forecloses and you are out on the street looking for another $800/mo lease.

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Unless there is default, there is no fraud. If there is default, the remedy is foreclosure. The risk is that the market falls such as the bank can't recover it's investement in the case of default. Then the bank might choose to pursue a fraud claim in order to pull the landlord and renter's assets into the damages pool under joint and several liability.

That is false. The fraud is committed when the attempt is made to procure a loan under false pretenses. The bank choosing to pursue a fraud claim civilly would be the least of the worries. Mortgage fraud is a federal crime prosecutable by the DOJ; it carries a penalty of up to 30 years in prison and up to $1 million fine. I don't believe all sums would be relevant in a case like this.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

You have an excellent point...I was considering the civil side only. However, if the bank is getting paid, the risk may still be worth taking. Everything comes down to a risk analysis or personal morality.

It turns out the $1200 was needed to refinance with a 15-year mortgage. The neighbors decided to go with a 30-year mortgage instead and so there was no $1200 requirement.

Ah then cool then. A longer term would certainly lower the debt/income ratio.

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I prefer to think of them as "Fighting evil in another dimension"

Yeah, deciding such things is something I try to stay away from advising people on.



Best possible outcome.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko