General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhat am I missing? Since when do banks give mortgages, let alone $500K + mortgages,
to anyone other than the owner of the property being mortgaged?
The answer is apparently obvious, because the reporter doesn't even ask the question. But I've never heard of this particular banking practice.
https://www.cnn.com/2018/05/04/politics/michael-cohen-donald-trump-campaign/index.html
Washington (CNN)As the 2016 presidential campaign was in full swing, Donald Trump's personal lawyer, Michael Cohen, took part in two financial transactions that gave him access to as much as $774,000, The Wall Street Journal reported Friday, citing public records.
The Wall Street Journal reported that, according to real estate records, Cohen increased his borrowing ability by $245,000 through a bank credit line tied to his Manhattan apartment.
Months prior to the February 2016 transaction, he and his wife co-signed a mortgage on a condominium in Trump World Tower in New York, which her parents owned, giving him potential access to an additional $529,000, the Journal reported, citing different real estate records.
Cohen has been at the center of a firestorm after reports surfaced that he made a payment ahead of the 2016 election to a porn star, Stormy Daniels, for her discretion on an alleged sexual encounter she had with Trump more than a decade ago.
MaryMagdaline
(6,856 posts)This is bank fraud. Although campaign finance violation might be a fine, bank fraud has serious consequences.
DrDan
(20,411 posts)One just writes a check as though from a checking account.
shraby
(21,946 posts)a double guarantee that the loan would be paid in case the parents died.
It's the only explanation I can think of.
Maeve
(42,288 posts)A co-signer isn't the actual borrower, but the one promising to pay back if the borrower does not.
pnwmom
(108,994 posts)Maeve
(42,288 posts)Her parents pulled that money out and may (or may not) have given it to him--no one is saying what the money was used for.
A lot of "maybe" in that story.
rzemanfl
(29,568 posts)Wellstone ruled
(34,661 posts)issue hanging out there. All one really needs is a Appraiser to give you a Jacked up appraisal. Seen this crap during the 2006 housing bubble. And if you have someone that has Hot Money to lend,and there are people out there that will take a rider.
pnwmom
(108,994 posts)It doesn't give you legal access to the proceeds of the money.
Mosby
(16,350 posts)Response to Mosby (Reply #23)
appalachiablue This message was self-deleted by its author.
mr_lebowski
(33,643 posts)Unless maybe they mean a home equity line of credit rather than a mortgage?
B2G
(9,766 posts)Signing a mortgage is a payment on a property. You don't get money as a result. It had to be an equity line of credit for the borrowers to have access to any money.
And if it was, and he cosigned, how is that illegal?
B2G
(9,766 posts)"Three months before he increased the home-equity line, Mr. Cohen gained potential access to another $529,000 in cash, through the fresh mortgage on the condominium owned by his wifes parents, Fima and Ania Shusterman.
The Shustermans didnt immediately return messages left at mobile phone numbers listed in a commercial database.
Mr. Cohen and his wife cosigned the $2 million mortgage on the condo in November 2015, New York real-estate records show, although they hadnt signed prior mortgages on the property.
The borrowers took out $529,000 in cash, in addition to refinancing existing debt on the condo, which the Shustermans bought in 2004 and used as their primary New York residence. It isnt clear whether or how the money was spent."
https://www.wsj.com/articles/u-s-probes-cohen-over-cash-he-built-up-during-campaign-1525478682
Calista241
(5,586 posts)Well see how far that gets him.
Mr. Ected
(9,670 posts)If it's a HELOC, the funds can be used for any (legal) purpose. If it was a purchase money mortgage the story would be different.
Not saying that something fishy wasn't happening here - the timing and MO seems suspect - but on its surface, there's nothing here that summarily discredits the transaction or indicates bank fraud.
B2G
(9,766 posts)Three months before he increased the home-equity line, Mr. Cohen gained potential access to another $529,000 in cash, through the fresh mortgage on the condominium owned by his wifes parents, Fima and Ania Shusterman.
The Shustermans didnt immediately return messages left at mobile phone numbers listed in a commercial database.
Mr. Cohen and his wife cosigned the $2 million mortgage on the condo in November 2015, New York real-estate records show, although they hadnt signed prior mortgages on the property.
The borrowers took out $529,000 in cash, in addition to refinancing existing debt on the condo, which the Shustermans bought in 2004 and used as their primary New York residence. It isnt clear whether or how the money was spent.
https://www.wsj.com/articles/u-s-probes-cohen-over-cash-he-built-up-during-campaign-1525478682
pnwmom
(108,994 posts)give him access to the proceeds on a property only the parents owned.
By the way, the parents are extremely wealthy.
Ms. Toad
(34,087 posts)A guarantor is a back-up after collection efforts against the debtor fail. A co-signer has the same liability (and frequently the same access to funds) as his felllow co-signers.
pnwmom
(108,994 posts)from a mortgage on someone else's property.
MaryMagdaline
(6,856 posts)If it is a HELOC loan, does the bank ASK what the money is for even though it can be any lawful purpose?
It's not any different than any other line of credit. It's just secured with your home.
bpj62
(999 posts)You cannot get a loan on property that you do not own. This is not a car loan where the bank can repo the car if you stop making payments. All parties must first be on the title before the lender will lend the money. What may have happened is that the inlaws added Cohen and his wife to the title but they did not apply for the loan. All parties would sign the mortgage/deed of trust which is the public notice that a property has loan on it. However the inlaws would not sign the promissory note since they didn't apply for the loan.
I have worked in the real estate settlement business for 30 years so that is where my information comes from. Cohens explanation relies on the fact that most people do not understand how title and mortgages work.
hunter
(38,326 posts)This was just on NPR:
--more--
https://www.npr.org/2018/05/04/608582970/why-few-of-the-millions-of-elder-abuse-cases-get-reported-each-year
I added the bold type.
I think most people cosigning a loan for a family member don't expect any direct benefit to themselves in return, only potential sorrow should the family member suffer hard times and have trouble repaying the loan themselves.
Maybe certain kinds of wealthy people and criminal swamp creatures don't think like that. If they cosign on a relative's car loan or mortgage they expect something in return beyond the comfort and well being of their relative.
Princess Turandot
(4,787 posts)In November 2015, just before the existing mortgage was refinanced, the Shustermans themselves (the in-laws) took out another loan against the value of their condo, for $529,000. The Cohens were not part of that transaction, so no money was lent to them by the bank.*
That new loan was then consolidated with the outstanding mortgage on the property, resulting in a mortgage of $1,979,000. On the new mortgage document, the two Shustermans and the two Cohens are listed as the borrowers.
I assume this is why the WSJ used that awkwardly phrased 'potential access' description, as opposed to just saying he had the $$. They don't know what was done with that money.
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*This comes from ACRIS, NYC's handy online real estate transaction database:
The $529,000 loan-(pg 3) https://a836-acris.nyc.gov/DS/DocumentSearch/DocumentImageView?doc_id=2015111201386001
The refinancing-(pg 3) https://a836-acris.nyc.gov/DS/DocumentSearch/DocumentImageView?doc_id=2015112401183004