There are three scenarios presented below. Read each scenario and identify the fraud scheme and/or legal violation occurring in the scenario. Choose one scenario and share in this discussion the fraud scheme and/or legal violation you think is occurring in that scenario. Be sure to identify the scenario (1, 2, or 3) for which you are sharing a response.

Scenario 1: Young couple June and Bud wanted to buy a home but their debt ratio was too high and they didn't have enough for a down payment. June's dad, Jack, decided to help them by applying for an FHA loan himself with the understanding that June and Bud would make the mortgage payments. Within a year of moving in, they were well behind in their monthly payments and the lender called Jack. Jack said he had no intention of making the payments so the lender started foreclosure procedures and June and Bud moved into Jack's basement.

Scenario 2: MLO Stu is working with Emily, who is planning on buying her cousin Doug's house. Emily is putting 10% down and Doug is willing to hold a 10% purchase money mortgage so Emily can avoid paying private mortgage insurance. As he's consulting with Doug and Emily to put the deal together, Doug asks Stu if he can just tear the mortgage up after closing since he doesn't expect Emily to pay him back.

Scenario 3: Patrick is behind on his mortgage payments and has been threatened with foreclosure. He has his house on the market and a few people are showing interest in purchasing the property. Patrick contacts his lender and asks if they would consider agreeing to a short sale. Patrick has several offers but does not submit the highest offer to the lender. Instead, he convinces his friend Joe to purchase the property. The lender agrees to the sale and once the lien is released, Joe sells the property at market value to the other prospective buyer, then he and Patrick split the $30,000 profit.