I'm looking for some advice. Lets just say that a real estate agent helps a buyer purchase a new home, buyer still had an existing home 20 miles away that he is upside down in but has gotten a renter in that home, moves into the new home. So in theory, the buyer owns two homes, one is a primary, the other a rental. Buyer now decides he can't handle the load of the two mortgages as the rental income just isn't enough. Buyer then decides to go for a short sale on his rental home (which he is upside down in). The real estate agent was involved in both transactions, the purchase of the 2nd home which is now primary residence as well as listing of the home that is going into short sale. The buyer has now lost his job and really is having even deeper trouble paying for anything at this point. Real estate agent is concerned that he has aided in what appears to be fraud and what appears to be walking away from the first home. What are the ramifications on this in your opinion?
Short Sale Fraud?
- Thread starter Susan_IHB
- Start date
NEW -> Contingent Buyer Assistance Program
Soylent Green Is People_IHB
New member
My .02....
The Agent is not liable for the decisions made by the buyer/seller. The buyer/seller is free to do what he wants to do with the property. That may be the reality of the situation.
Personally speaking the Agent needs to perhaps quit the business for giving such dangerous advice in each transaction. Assuming this all has transpired within the past 2-3 years the Agents advice on selling, renting, purchasing, as well as arranging a short sale has been enabling this person to game the system.
The client may have lost their job due to circumstances beyond their control, but overleveraging was a choice, egged on by poor advice, and now we are going to have to sop up the losses because this Agents appetite for commission over conscience.
Again, my .02
Soylent Green Is People.
The Agent is not liable for the decisions made by the buyer/seller. The buyer/seller is free to do what he wants to do with the property. That may be the reality of the situation.
Personally speaking the Agent needs to perhaps quit the business for giving such dangerous advice in each transaction. Assuming this all has transpired within the past 2-3 years the Agents advice on selling, renting, purchasing, as well as arranging a short sale has been enabling this person to game the system.
The client may have lost their job due to circumstances beyond their control, but overleveraging was a choice, egged on by poor advice, and now we are going to have to sop up the losses because this Agents appetite for commission over conscience.
Again, my .02
Soylent Green Is People.
OCCOBRA_IHB
New member
[quote author="PropertySeller" date=1243666959]I'm looking for some advice. Lets just say that a real estate agent helps a buyer purchase a new home, buyer still had an existing home 20 miles away that he is upside down in but has gotten a renter in that home, moves into the new home. So in theory, the buyer owns two homes, one is a primary, the other a rental. Buyer now decides he can't handle the load of the two mortgages as the rental income just isn't enough. Buyer then decides to go for a short sale on his rental home (which he is upside down in). The real estate agent was involved in both transactions, the purchase of the 2nd home which is now primary residence as well as listing of the home that is going into short sale. The buyer has now lost his job and really is having even deeper trouble paying for anything at this point. Real estate agent is concerned that he has aided in what appears to be fraud and what appears to be walking away from the first home. What are the ramifications on this in your opinion?</blockquote>
This was scam that was going down in the inland empire almost 2 to3 years ago. People buying homes 200k less and saying they are renting their existing house and show a phony rental agreement. Then when it closes they let their old underwater home go back to the bank. If fueled a lot of fraudulent sales in 2007/2008.The banks stopped this about a year ago and that if you where to buy another home you have to qualify for both payments in full irregardless if you have a renter. Yea the agent may be part of the fraud but is more than likely an idiot of not really grasping the scam that was going on. If the bank wants to get nasty they could report this fraud and i am really surprised that the bank did not catch this.
This was scam that was going down in the inland empire almost 2 to3 years ago. People buying homes 200k less and saying they are renting their existing house and show a phony rental agreement. Then when it closes they let their old underwater home go back to the bank. If fueled a lot of fraudulent sales in 2007/2008.The banks stopped this about a year ago and that if you where to buy another home you have to qualify for both payments in full irregardless if you have a renter. Yea the agent may be part of the fraud but is more than likely an idiot of not really grasping the scam that was going on. If the bank wants to get nasty they could report this fraud and i am really surprised that the bank did not catch this.
irvine_home_owner_IHB
New member
If this happened recently... the lender/underwriter/broker should be ashamed... and deserves what they get.
This loan should have never been approved if the buyer was as leveraged as the OP states.
This loan should have never been approved if the buyer was as leveraged as the OP states.
freedomCM_IHB
New member
well, this might change the game:
from CR discussion...
nevadabuilder (profile) wrote on Mon, 7/6/2009 - 2:30 pm *
<strong>Word is circulating here that BofA is no longer agreeing to any short sales.</strong>
from CR discussion...
nevadabuilder (profile) wrote on Mon, 7/6/2009 - 2:30 pm *
<strong>Word is circulating here that BofA is no longer agreeing to any short sales.</strong>
freedomCM_IHB
New member
Anybody in the biz hear anything similar for California?
usctrojanman29_IHB
New member
[quote author="freedomCM" date=1246960870]Anybody in the biz hear anything similar for California?</blockquote>
If that was the case in California, it would sure make things interesting as they have the most at-risk loans.
If that was the case in California, it would sure make things interesting as they have the most at-risk loans.
graphrix_IHB
New member
Not in the biz, so to speak, but they are not foreclosing on them like they should either.
OCCOBRA_IHB
New member
[quote author="freedomCM" date=1246960803]well, this might change the game:
from CR discussion...
nevadabuilder (profile) wrote on Mon, 7/6/2009 - 2:30 pm *
<strong>Word is circulating here that BofA is no longer agreeing to any short sales.</strong></blockquote>
Sounds about right as most banks are now giving up on loan mods and are just letting them for foreclose period. Makes a lot of sense as the banks are not reducing principal on their loan mods but extending the loan length and teaser payments for 5 years and are finding that 75% of these loan mods going back into foreclosure after the first year so they have given up. Reducing the principal has shown better success to save a house from foreclosure but the banks can not afford to take that instant hit when they can foreclose and make the loss disappear in their shadow inventory and hidden RE toxic accounting books that they do not report to the general public the loss courtesy of the Feds using different accounting procedures to make it look like the banks are making money.
from CR discussion...
nevadabuilder (profile) wrote on Mon, 7/6/2009 - 2:30 pm *
<strong>Word is circulating here that BofA is no longer agreeing to any short sales.</strong></blockquote>
Sounds about right as most banks are now giving up on loan mods and are just letting them for foreclose period. Makes a lot of sense as the banks are not reducing principal on their loan mods but extending the loan length and teaser payments for 5 years and are finding that 75% of these loan mods going back into foreclosure after the first year so they have given up. Reducing the principal has shown better success to save a house from foreclosure but the banks can not afford to take that instant hit when they can foreclose and make the loss disappear in their shadow inventory and hidden RE toxic accounting books that they do not report to the general public the loss courtesy of the Feds using different accounting procedures to make it look like the banks are making money.