Scenario: A builder actively solicits buyers by agreeing to make their first 12 house payments. The buyers are given a lump sum at closing to use when making the payments. Like most builders, this one has assembled a team of trusted professionals comprised of a title company, loan officer, and listing broker.
The money is migrated from builder to buyer in a creative way.
In one specific example, a commission of 13% was intentionally charged to the builder on the settlement sheet even though the actual commission paid was only 6%. After closing, the difference between the 2 commission amounts was rebated to the buyer by the real estate broker.
Selling price of property: $250,000
Commission @ 6%: $15,000
Commission @ 13%: $32, 500
Buyer's payment: $1,498.88/monthly
Buyer's payment: $17,986.56/annually
Bottom line: $17,500 rebated to buyer
This is an actual scenario shared with me recently.
Question: Is the above scenario an example of mortgage fraud if the 13% commission is represented on the settlement sheet?