Cash Back To Buyer -- Legal in Hawaii?

[Rob L]

I am not licenced to practice law in Hawaii, but I am in three other states. So, this is not legal advice, but my humble opinion. You can contract for almost anything under American law, so cash back to the buyer is probably legal, BUT if it is not disclosed to the lender, then it may be bank fraud.

Aloha,
Rob L

[jdirgo]

Correct, it must be disclosed to the lender. Anything over 3% credit back is usually not allowed by the bank.

John Dirgo, R, ABR, e-PRO
Island Trust Properties, LLC
808-987-9243 cell
http://www.hawaiirealproperty.com

[Dave M]

HH,

That's why I didn't want to quote rates and/or specifics. Here in TX it is I think:

With a LTV (loan to value) of 90% or less it is OK to have 6% cash back.

With a LTV of 95% or more it is 3% max.

That's kinda where I was going when I asked (to no avail) how the Mkt there was affected by the drying up of sub-prime loans.

The sub-prime lenders were much more loose with their requirments, or at least that's my understanding.

Take care,
dave