Posted on: 18th Oct, 2009 05:06 pm
Can you find any holes in the following process:
1. John Doe takes out $500,000 mortgage to buy Jane Doe's house.
2. Jane Doe transfers $500,000 to John's bank account and in turn John transfers property title back to Jane.
3. The net effect is that John just received a personal loan for $500,000, which he is paying back at 5% interest.
Can this work?
1. John Doe takes out $500,000 mortgage to buy Jane Doe's house.
2. Jane Doe transfers $500,000 to John's bank account and in turn John transfers property title back to Jane.
3. The net effect is that John just received a personal loan for $500,000, which he is paying back at 5% interest.
Can this work?
By the way, Jane Doe's incentive for participating in this process is a cut of the money, say $50,000. Everyone wins
Yeah, the problem is that there is a lien on the property (deed). That deed cannot be transferred without the lien being satisfied. So, when you attempt to transfer the property back to Jane, the bank will have to be repaid the $500k. So, you have accomplished nothing.
Thank you Eric for answering my question
Looks like some puzzle
May be some one is trying something
May be some one is trying something