Home Equity Lost Because Seller/Mortgager Misclassified the Type of Home
Provided by HG.org
There are various complications that may arise when attempting to acquire or secure home equity in a sale or purchase based on the actions of the buyer or seller. When this occurs, it is important to understand what occurred, how to proceed and if a lawyer’s assistance is necessary to seek a resolution for the problem.
When buying a property, it is crucial to view the real estate in person, have a surveyor, assessor and other professionals examine the building and grounds. Through these experts, it is possible to determine if a problem may arise when buying, securing financing and in equity into the house. Based on the classification, characteristics and if there are defects, it is possible to lose equity before the purchase has even finalized. Refinancing and mortgage companies may need the specific type of house or qualities to provide funding for the project. If this is not filed correctly, serious issues may arise when the lending agency is attempting to complete paperwork.
When someone purchases a house, there is a certain amount of equity in the property. Acquiring a loan or other funding against the building takes from the equity already in existence. If the funding is lost or the house is damaged beyond repair, the equity is completely lost. It is possible to take out cash through a loan. Then, if enough financing has been accomplished, it is possible to owe more than the property is worth, and there is no equity left. No matter what situation occurs, if it is the fault of another company or person, it is crucial to hire a real estate lawyer to determine what may be possible.
Fraudulent Claims in Equity
When a person purchases a property, and is not able to view it himself or herself, it is important that the claim and classification are correct and appropriate for financing the purchase and renovations. The mortgage company, broker, real estate agent and others may become involved initially or at a later time. If the claim is not correct and equity is placed against a loan, it is possible that complications may ensue. The mortgage company may deny a loan, financing or refinancing. If money has been taken out against the property through a lien or loan, it is possible to lose the remaining equity when the first evaluation places the value of the house at a higher amount than when an assessment is performed.
Sometimes the seller may not be aware of the true classification of a property. When a single home building is sold, it is classified as such and this is used for various types of paperwork. However, if it is discovered that the house is a mobile home, this is a different category entirely and may lead to a rejection of refinancing or regaining equity in the property. Because equity is hard to earn back and based on the local housing market, it is vital that the seller ensure the buyer is aware of exactly what the home is. However, it must be proven to be fraud for legal action to continue in this regard, as the seller may not have been aware of the true nature of the house.
The Intention of the Seller
When a property is purchase and then the equity in the home is lost due to carelessness, recklessness or problems the seller may have caused, it does not necessarily constitute a violation of the law. If the seller was intending to sell a single-family home and was unaware that the actual property was classified legally as something else, he or she may not have intended for the complications to arise. However, if the willful act of causing chaos or an issue for the buyer was the idea behind selling the property as a different category or classification, then this could be deemed fraud. There are many schemes that various parties engage in that could lead to fraudulent sales.
Legal Help in Lost Home Equity
If the seller was intending to defraud another through selling the home as a different type, he or she could face serious legal complications. It is important to determine the truth to the situation before seeking any type of legal action. Then, a consultation with a real estate lawyer may clear up the matter in what is possible. Once a crime has been determined, it is then possible to seek criminal, and in certain situations civil, charges against the seller. However, if this person is a foreign citizen that does not reside in the United States, the matter becomes more complex.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.