Oh, and 6 months of paying the mortgage herself and living there temporarily is going to be a LOT cheaper than a defense attorney for mortgage fraud. Think hundreds of thousands in order to try and stay out of jail. Then add the huge fine. And the mortgage call back.

It's all going to add up to way more than the house probably cost. Tell her to move in this week!

Your sister needs to suck it up as a lesson learned and pay the next 6 months out of her savings, or get a second job. And hope like crazy that she doesn't get turned in for mortgage fraud. I would be so nervous that I would move into the house for 6 months.

And she shouldn't have any more conversations with her friend. The friend already sounds saucy about the whole thing and how your sister was just using her to get a free house, etc. The friend could easily get her in trouble, so she needs to either stop communication with the friend, or limit it to congrats on the new job, how do you like the area, blah, blah, nice-y nice stuff.

The family needs to stop talking about it too. What's done is done, how many weeks do they need to keep talking bad about the friend? Someone in their orbit is going to overhear this, who may not like what your sister did, and secretly tell on her.

Your sister could end up in jail and have the mortgage called in. She'd better get her bags packed and move into that house this week.

Anonymous wrote:This is the part of threads like these where the OP stops responding because they realize it’s much worse than they thought (mortgage fraud).

OP the only good option is for you to stay away from this topic and not get involved in your sister’s irresponsible and illegal decision. Don’t even discuss it with her.

OP Here:
Yes I did not realize just how bad this was on my sister’s side.
Because everyone in my family is blaming her good friend saying this friend ditched her and ran, leaving my sister holding the bag.

Anonymous wrote:

Anonymous wrote:If it was a successful daycare, your sister should sale it as a business with real estate
Talk to business broker about it.

A home daycare with zero staff is not a business that is sellable; it’s not worth anything more than the value of a room of used kids furniture.

Zero staff and no enrolled children. That is not an ongoing business generating income

This is the part of threads like these where the OP stops responding because they realize it’s much worse than they thought (mortgage fraud).

OP the only good option is for you to stay away from this topic and not get involved in your sister’s irresponsible and illegal decision. Don’t even discuss it with her.

Anonymous wrote:How was the friend able to establish an in-home daycare in a residence that she wasn't legal to live in the first place?
I'm guessing the daycare want bonded, o sure, or licensed?

Your sister is playing with fire in so many ways. At least now, the illegal occupancy and her illegal business are no longer. Your sister should feel relieved and not angry

+1
The sister is lucky that no incidents happened at the daycare.

Anonymous wrote:If it was a successful daycare, your sister should sale it as a business with real estate
Talk to business broker about it.

A home daycare with zero staff is not a business that is sellable; it’s not worth anything more than the value of a room of used kids furniture.

Anonymous wrote:Why didn't your sister buy the 2nd house and tell the mortgage company it would be a rental/investment property?? At least it would be clean and legal.
Sure, the loan may be at a slightly higher rate, but she could roll-over the higher monthly payment to her friend when said friend goes to pay her rental fee.

I am guessing because the Sister was trying to commit fraud to the bank, by receiving a lower mortgage rate.

She was probably banking (no pun intended) on the fact that her friend would be so grateful for being able to rent a home to do daycare that she would feel indebted to the Sister forever and remain in the house for EVER!
Then the Sister would ultimately have the best of both worlds: a free house since the friend would be paying the mortgage from the jump, ETC.
Meanwhile the friend would be conveniently paying her mortgage since day one.

This was really not a true favor extended to a friend in need.
It was actually a scam to get a free house.

If it was a successful daycare, your sister should sale it as a business with real estate
Talk to business broker about it.

Your friend needs to move into this house and rent out her current home

Would that work?

How was the friend able to establish an in-home daycare in a residence that she wasn't legal to live in the first place?
I'm guessing the daycare want bonded, o sure, or licensed?

Your sister is playing with fire in so many ways. At least now, the illegal occupancy and her illegal business are no longer. Your sister should feel relieved and not angry

Anonymous wrote:Your sister is a massive fool with a huge appetite for risk.

She’ll just have to rent it to someone else.

+1

and never mix business with family or friends…

Why didn't your sister buy the 2nd house and tell the mortgage company it would be a rental/investment property?? At least it would be clean and legal.
Sure, the loan may be at a slightly higher rate, but she could roll-over the higher monthly payment to her friend when said friend goes to pay her rental fee.

So she has declared primary residence in both her houses?

This story kind of makes me mad.
People like your sister are out there committing fraud by lying to banks to get loans while other hard-working folks are getting turned down for home loans who are more honest and actually have integrity.

** Her friend was in a bad position - being poor does not mean she was a bad person.
If your sister truly wanted to help her friend she could have helped her get a job or something.
No one in their right mind would take out a house loan by lying to the bank.

I think the friend was right. Your sister was just going to use her friend to pay her mortgage and she would have gotten a free house out of the deal while her friend ended up with nothing.
That would be unfair for your sister to get a free house without paying a dime for it.