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Banks committing fraud? Does it surprise me? Nope!
Last week Diana Olick of CNBC wrote a compelling story, Big Banks Accused of Short Sale Fraud
I’ve been hearing for sometime now that banks have been asking for money on the side when a second mortgage applies on Short Sales. Obviously, being kept OFF the HUD (Settlement Statement) is what makes this housing fraud.
Are the agents complying with this request/demand from the banks, stupid, guilty of fraud or just trying to help the Short Sale seller?
I would say all three are more than likely applicable. For this very reason these agents don’t want to step forward and be accounted for nor do they want to be in a position where the banks stop sending them homes to sale and/or stop accepting their Short Sale offers. Therefore, the silence or shall we say, not willing to step up and be accounted for in Diana Olick’s CNBC’s article.
For those who are not aware, all money transactions MUST show on the HUD statement. If they don’t show on the HUD statement than this is blantant fraud. This is a big no, no! And anyone with a license knows or should know this.
For those Realtors ® who have walked away from these blood sucking banks and avoided paying under the table, congratulations for doing the right thing!
Some Short Sale banks (mortgage holders) are refusing to accept a Short Sale if the agent(s), seller or buyer does not pay additional money outside of escrow. The second lien holder wants more of a payoff than the 1st lien holder is willing to share with them so they ask the parties involved to line their pockets. These banks to prove a point will force the property into foreclosure if they don’t get their way.
As you will notice in Diana’s article 3 major banks are guilty of housing fraud. And frankly, any agent who is part of this is also guilty of fraud no matter what your incentive is or was.
Same is true when giving referral money, it MUST be on the HUD statement. That’s why Realtors ® don’t pay referral fees to anyone whose not licensed. Legally, a Realtor ® can gift a small token of up to $25 per client per year.
Such a dilemma. As long as sex, drugs, money and greed are with us, so will fraud. One major element is needed in order to make this a perfect storm, lack of character. Amazingly, we have been witnessing this at an alarming rate over the past few years from Wall Street and down into the alleys of Main Stree
Clearly, a Respa violation.
(RESPA is the Real Estate Settlement Procedures Act, the 2008 law requiring that consumers receive disclosures at various times in the transaction. It outlaws kickbacks that increase the cost of settlement services. RESPA is a HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is enforced by HUD. Read more about it here.).
Thank you Diana for bringing this to the forefront. Now, let’s see if the Feds step in and stop this!
Other Short Sale Articles:
You Can’t Be a Toast Watcher and Buy a Short Sale
Pingback: Are Banks Discriminating Against VA Homebuyers? | Sacramento Real Estate Voice
Everyone read all the news over the weekend on Freddie?
I think this is a big ado about nothing. Disclosure has always been important. The definition that Freddie gives is hiding facts that would have influenced the lender’s decision to accept a short sale. That sure sounds like fraud to me. I think this really is “business as usual”. there are no changes to speak of here, as far as I can tell.