Estimated read time: Less than a minute
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
Paul Nelson, KSL NewsradioBanks and other mortgage lenders say they're concerned about a new way some people are qualifying for a home loan.
The trick goes like this: A borrower buys a home worth $200,000, but tells the lender it's worth more, and uses that extra money as a down payment. "If the bank is not told that the home is worth $200,000 when in reality it is, then you have dishonesty, deceit [and] fraud, if you will," says Eva Rees of the Utah Department of Financial Institutions.
She says banks sometimes will let you borrow more than the home is worth, and do 100 percent loans, but they have to know that's what they're doing. "It's not necessarily illegal as long as full disclosure is made," Rees says.
Rees says banks don't normally like to loan to people with no down payment. She says those borrowers walk away from the loan more often.
