One way to reduce your mortgage balance is to get your lender to agree to let you sell the property for less than what will yield a full payoff of the mortgage balance (a "short-sale"), and forgive the difference. In order to prevent someone from simply refinancing via this method, a lender will usually require some form of the following terms to be affirmed as part of the transaction:
"Hereby affirm that this is an “Arm’s Length Transaction”, certifying under penalty of perjury that to the best of my knowledge and belief:
Sample Short Sale Affidavit from Central Mortgage.
If you were to sign this form knowing that the information was false, that would likely be bank fraud (https://www.law.cornell.edu/uscode/text/18/1344) punishable by a fine of "not more than $1,000,000 or imprisoned not more than 30 years, or both." Yikes. So despite what your realtor may advise, don't just sign forms at a real estate closing that you know are false. In my opinion, financial problems should not be compounded by criminal problems.
Generally a short-sale is not a means to stay in your home. If you or someone you know is looking for foreclosure alternatives in Minnesota, please call a Drewes Law attorney at 612-285-3053 for support.
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