Firing a buyer?

[ISellRiverview]

I posted this on ActiveRain but thought I'd paste it here too as I want as much feedback on this situation as I can get.

Buyer has 6 kids and her husband works two jobs. She is chronically ill. She is currently renting a townhome but the HOA is evicting them for having too many people in a certain number of square feet. She wants to buy and tells me they've had a few credit issues in the past but that overall the credit is good and they had gotten preapproved last year when they were thinking about buying. I felt really bad for her situation and bought into the sob story a bit I guesss. So I took them out to see some homes, all under $160K, so its not like we are talking about a huge commission here, but I wanted to try to help them find something.

I had my mortgage girl call them to get them prequal'd. As it turns out they have a lot more credit card debt than they stated, and have collections after them. They also have zero money to put down and need 100% financing. Buyer also insists she qualifies for some special homebuyer's assistance programs but after the lender checked into it, those funds are gone for the year in the county they are looking in, and the husband may make too much to qualify anyway, despite having 6 kids. It is now becoming apparent that this is not going to be easy.

My mortgage girl tells buyer to call the credit counseling and see if she can get her large credit card debt reduced and get the issue fixed on their credit report so she can buy - that's the only way. Buyer refuses and says the have no money left over at the end of the month to pay down the debt, even if it gets reduced, and maybe they should just file bankruptcy. Of course mortgage girl says you don't want to do that, try to work something out, but buyer is looking for a handout and an easy way out it is starting to seem.

Mortgage girl calls me back and tells me the situation - it is not going to happen. Oh and by the way, the buyer just told her she'll find SOMEONE to write the loan, whatever the rate and whatever the cost, because she'll just file bankruptcy anyway and get to keep her house and be out of debt. Um, hello, that's not how it works! Even if they got homesteaded, if you stop making mortgage payments, the bank can still take your house! I'm not sure how she thinks that is going to work. She claims she's "done this before and it worked well" to my mortgage girl.

At this point after hearing this 2nd hand, I am thinking this little plan of the buyer's sounds an awful lot like conspiracy to commit mortgage fraud and/or credit card fraud... or am I wrong here? I really don't want to deal with this buyer anymore, she's seeming crazier by the minute and the amount of potential money to be made is minimal anyway. How would you deal with this? Am I right in telling her this is conspiracy to defraud a lender and I cannot help her anymore in her house hunt? What would you do? It doesn't seem right to me. Also if I let her loose, do I need to report these comments of hers to someone? I don't want her coming back at some point saying "My Realtor told me I could do this...." or something. I was thinking I might email her if/when I cut her loose so I have it writing.

[Micheal Pannell Realtor]

I will leave it alone abd find another buyer

[judyo]

Walk away from this one. Your loan officer told you she is not qualified - end of story. Forget about reporting her or worrying about something coming back to bite you. You got her pre-qualified and it isn't working. No need to "threaten" her (no matter how true you write the e-mail up) as that will just stir things up. This is the kind of buyer you simply cut loose & let someone else waste their time on, if she can find another agent to work with her.

[JimOlenbush]

Drop her immediately! I wouldn't waste any more time trying to communicate with her about mortgage fraud. No one is going to lend her any money anyway. Your next buyer will have good credit and a healthy down payment!

[ISellRiverview]

I know, its just I feel like I need to give her a reason or else she'll keep bugging me to take her out and she'll say she'll find a lender. Ugggh. And I kinda want to tell her she's doing something wrong. She claims to be a devout Christian too. What would Jesus do? Commit mortgage fraud? I think not... lol.

[SEO Nick]

Definitely a shady person. I'd follow everyone else's advice in this thread Steer Clear!

[REW Christian]

Tell them "I have a policy of not taking people to view homes until they can supply me with a pre-approval, in writing"

[ISellRiverview]

"I have a policy of not taking people to view homes until they can supply me with a pre-approval, in writing"

I have been trying to get people approved first too but since she told me they'd just been approved at the end of last year, I didn't think it was going to be a problem. *sigh*

How do people usually react when you tell them your policy?

[REW Christian]

But they are not currently approved. And you likely have clients who are, correct?

Personally I don't have that as a policy as I am a writer at REW ! LOL. I was suggesting that you tell them that. If I told anyone that they would likely reply with "Well great! I have a policy of buying a home off actual Realtors!"

[webmaster]

Christian, I hope you were quoting someone else, because you are not a Realtor - Anyways, onto the buyer - I would just tell her I am sorry, but until you have gotten yourself financed I cannot help you, please call me if your situation changes (Which you already know it won't) but at least this way you get to be nice, and let her off the hook.

"Policy" - is such a strong word.