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From: mark@cbosgd.UUCP (Mark Horton)
Newsgroups: net.invest,net.consumers
Subject: Re: "No Money Down" (Other People's Money) Scam
Message-ID: <1725@cbosgd.UUCP>
Date: Wed, 1-Jan-86 23:36:06 EST
Article-I.D.: cbosgd.1725
Posted: Wed Jan  1 23:36:06 1986
Date-Received: Thu, 2-Jan-86 06:18:17 EST
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Organization: AT&T Bell Laboratories, Columbus, Oh
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Xref: watmath net.invest:975 net.consumers:3721

I saw this too.  It was hilarious.  My wife's reaction: "Don't these
mortgage companies ever run credit checks?"  If I were a mortgage
company and somebody came to me wanting to borrow $180K, and the
credit check I ran on him showed he owed $200K on Visa cards, there
isn't much chance that I'd approve the loan.  (Don't tell them about
the Visa cards?  Well, then, that means you have to perjure yourself
on a loan application.  I wonder how many years at the big house
that's worth?) Also, these credit checks take time - 2 months or so.
Where does he go - Vito's Mortgage and Pest Elimination Service?

Some other inconsistencies: what about the cash advance charge?  When
you get a cash advance, don't you have to pay 1.5% of the advance as
an advance charge?  That adds up to $3000 in fees.  Then there are
closing costs and loan origination fees, that's another several
thousand dollars.  And he has to sell the house - that takes time,
after all, it wasn't selling in the first place.  Let's see now, the
real estate commission at 7% is $12,600, unless he can sell it himself.

Oh yes, he figures on financing the house at 90% of the appraised value
of $200,000.  But he just bought the house for $150,000, and the house
is going to have to be appraised for the loan, and if it just sold for
$150,000, the appraisal isn't likely to be for $200,000.

Finally, there's the matter of the annual $20 or so fee on each Visa card.
For 200 cards that's $4000/year.  He said "just get the card from somebody
in Texas or Conn, they can't charge a fee."  I understand that Texas just
started allowing annual fees, and that every bank in Texas just started
charging the fee to all their existing accounts, without bothering
to tell anybody.

	Mark