Having Issues with Mortgage Fraud Article

This is an excellent article from USA Today on one aspect of mortgage fraud and how it is committed.  The article explains how a team of "professionals" can use a "straw buyer" (think of the story of the three pigs) to steal tens of thousands of dollars from a bank and homeowners.  One team can do this many, many times and walk away with hundreds of thousands of dollars.

See the entire article here:  http://money.aol.com/news/articles/real-estate/_a/mortgage-fraud-cases-up-by-two-thirds/20080603123509990001

According to the article, two people are under investigation by the FBI involved in the house in Las Vegas on Gold Mine Drive and Rolling Hills.  The house was on the market with no activity for months.  Then, out of the blue, a man showed up wanting to pay more than $40,000 more than the asking price for the home.  Catch?  The sellers would have to pay $43,000 to another company at the time of closing.  And they had to move quickly as the buyer wanted to move in right way.  Apparently, the real estate agent who represented the sellers was the wife of a special agent for the FBI.

I hope it was some sort of sting, and that this woman did not participate in this scheme in any other way.  If the real estate agent did not participate as a way to catch the mortgage fraud perpetrators, then she is likely guilty of mortgage fraud herself. 

As far back as 2005, the real estate company I worked with in California was training its agents to bring any escrow instructions that involved payment of a third party, especially payment of large sums of money, to the broker right away.  The fact that 15% of the homes purchase price was being paid to an unknown third party at or shortly after closing, and given the previous showing history on the house (or lack thereof), as well as the speed of closing, should have all been BIG red flags for the sellers agent. 

In California, the team I worked with had a purchase offer come through that involved the payment at closing of almost $50,000 on a $350,000 home.  Supposedly, the money was to be used for additional 'landscaping'.  Yeah, right.  We brought it to the broker's opinion, and it was decided that this was waaaaay to risky to pursue.  The sellers were notified in writing about mortgage fraud, and they were given the option of not responding or we would cancel the listing.  They opted not to pursue the offer.

In my opinion, the sellers' agent bears some of the responsibility here.  She should have raised those red flags.  She should have been the one to call in the FBI prior to closing.  Did this scheme hurt the sellers?  No, probably not directly.  They did, after all, sell their home.  Did it hurt all of us who have to bear the cost of the mortgage debacle now, including current buyers and sellers who now have to deal with tightening restrictions and ridiculous contingencies placed on them by lenders who have turned 180 degrees by becoming over-conservative in granting loans?

What do you think?

"Well, I don't have to, but..."

Apparently, there is a checklist at many of the larger brokerages in Washington State for agents to follow during a transaction.  These checklists are inaccurate, and if brokers and agents were paying attention, they might realize this.

Lately, agents have been asking me for a copy of the earnest money check when I represent the Buyer.  Today, I had an agent get very huffy with me when I explained that since Mutual Acceptance was Friday, I actually had two business days to collect the earnest money check.  Therefore, our deadline for collecting it was actually tomorrow.  I also told her that I would have to get the Buyers' permission before releasing that to her.  As I was asking her if there was anything else she needed, she actually hung up on me. 

Nice, real professional.  No wonder our profession in general has such a great reputation!  But we'll save that for another blog post.

I can certainly understand why a copy of the earnest money check would be useful.  Whenever I am the Seller's Agent, I write into the contract that the Buyer will provide a copy of the earnest money check within 24 hours of mutual acceptance.

BUT!  Unless you write it into the contract, there is no requirement in the NWMLS forms that the Seller receive a copy of the earnest money check.  If the Buyer is not required to do it, then I have to ask permission before releasing a copy of the check to the Sellers. 

Frankly, some Buyers will not want their personal information released to the world.  There is such a thing as fraud and theft in the world.

So, Washington State agents, if your office wants a copy of the earnest money check, you better explain this to your Sellers, and get it written into the contract.  I usually try very hard to cooperate with other agents, but I don't have to. 

And please, don't get huffy with me because you haven't read the contracts you are having your clients sign, and you are not properly doing your job!

"Have we hit bottom yet?"

"I want to buy a house when the prices are at their lowest."

"How long before the market turns around again?"

"I'll wait a while longer til prices drop a bit more."

"Buy low, sell high" doesn't apply only to the stock market - it applies to real estate as well.  However, the problem that plagues stock investors also plagues the real estate investor -- how do we know we have hit bottom?

As real estate agents, we listen to the financial experts, monitor the economy and the real estate market in general, watch the national trends, track home prices and foreclosure rates, and analyze the historical data.  But for all that research, and after two decades in the real estate business, I can only offer an educated guess as to when prices will be at their lowest.

The inherent problem in "waiting for the bottom" is that no one knows it is "the bottom" until months later -- and then it is too late.  Prices have started to rise, interest rates are fluctuating, and who knows what the economic forecast will be?  Bearish?  Bullish?

In real estate in Kitsap County, we are experiencing a Buyer's Market.  There are too many homes on the market (supply) and not enough serious buyers (demand).  When supply exceeds demand, prices fall and competition between sellers flourishes.

If you are considering purchasing a home in the near future, whether to live in or for investment purposes, don't wait!  Take advantage of the foreclosures, pre-foreclosures and short sales happening around us.  You can find the right home at a good price for yourself and your family.

How to Never Lose Your Small Child in a Crowd Again...

Yes, even on vacation in San Diego I can blog if something important or timely comes up.  To me, this was important.

We went to Legoland today.  It was very crowded, and I was concerned that I wouldn't be able to keep track of Adam, who is 4 years old and very mobile, curious and well, fast!

To help prevent that, I dressed him in a bright red shirt.  He was very easy to spot when he was farther away from me than he should have been.  A brightly colored hat works well too.

Even better, my friend Ashley T. gave me a great idea.  Today, I used a Sharpie marker (because they don't wash off as easily)  to write "mom's cell" and my cell number on the inside of Adam's arm.  Yes, it looked funny, but I knew that if he got lost, I would get him back. 

Adam is too young to really understand that he should go to Lost and Found or Security, so this worked really well.  I told him if he was lost to go find a Legoland employee in the red shirts and show them his arm.  They would find Mommy.

I think I actually enjoyed the day more because I wasn't as stressed out, knowing that we had a good back-up plan if we got separated.

I've Become One of Them (And Guess Who's Fault It Is?)

First, let me just say that the final transformation is pretty much Active Rain's fault.  And even if it isn't really, let me believe that it is because I have to blame someone.  So tonight, that would be all of you.

I never meant to be one of them, but it happened slowly, and it wasn't until tonight that I realized that I had done just what I never wanted to do.  I became one of them.

Those of you who have been married to military will know who I am talking about...  It's those wives!

You know the ones I'm talking about.  One month after their partner gets home from a deployment or an underway period, you hear them moan, "When is he going to sea again?"  And you are shocked and horrified...

At least I always was. How could they say that?  Didn't they love their spouses?  How could they not want their husbands home every night, to have dinner with, give the little one a bath and tuck them into bed, then cuddle up with and fall asleep themselves?  Was there no love there?  Could those women really be that heartless and cold?

And then it began.  At about year four (right after I had the baby three months early and found out that hubby would not have duty for the next year) I began to think "It sure would be nice if he had duty again once in a while."  I didn't feel bad thinking it. 

For the non-navy readers, duty usually requires a servicemember to stay away from family for at least one full day and night, usually sleeping on the ship or boat.  Some spouses get phone calls and lots of email during duty days.  I'm lucky to get a good night phone call, and sometimes that's ok. 

I had taken that year off from real estate to stay home with our miracle child.  The navy had moved us to Fort Leavenworth, Kansas.  It was a lovely town and I made some phenomenal friends there, like my Karens.  However, it was also a hard time for me.  Because I wasn't working, I tried to compensate for my lack of income in other ways, and of course overdid it.  I identified so much with being a Realtor, that when I took time off I lost part of my identity.  I looked to my husband for approval, and knocked myself out trying to get it.  The house was spotless, the laundry done, the beds even got made.  I shopped, I volunteered, I played with baby Adam, and I was exhausted. 

When I realized how much I was doing, I dreamed of a night of duty, so I could leave the dirty dishes in the sink and the beds unmade.  It had nothing to do with him, it was me.  I didn't love my husband less, I just had other things to do.

Then we moved again, this time to California.  I began working again, got my identity back, became as busy as ever.  However, by then, I couldn't stop being happy about duty days.  

One night, every week or so, I got to spend an evening alone with my son.  After a hard day of work and babysitters, the zoo, the beach and real estate, it was just the two of us, eating mac and cheese, snuggling under the covers watching the Wiggles as Adam fell asleep against mama in mama's bed.  It was nice! 

And I didn't feel guilty about it at all.  I didn't love my husband less, I just had other things to do.

And now we've been back in Kitsap County, Washington for nine months.  As soon as we arrived home, my husband was sent to school for six weeks.  I was afraid at first.  Afraid of being alone for so long again, afraid of being alone with Adam, caring for him by myself.  Many of my old friends had moved away.  I had my parents here, but who else could I turn to for help if I needed it?  And with my health problems, I was sure I would need it.

And the biggest thing?  What would I do about working?  Of course I would re-ignite my real estate career here.  I love real estate in Bremerton and Kitsap County!  How could I not get back into it full time?

But I was afraid.  I have always been successful.  I have rarely failed at something, even when I was a child.  What if I failed at being a successful real estate agent again?  What if I failed at being a good navy wife?  What if I was a lousy daughter?  (I've done if before, I'm sure I'll do it again.)  Worst of all, what if I failed to be a good mother to my miracle boy?

What I had forgotten is that I am never alone for long.  I always make friends.  Good friends!  And my parents have been a godsend to me.  I knew I moved home for the right reasons.  The Kitsap Moms Meetup group that I started for moms and kids in Kitsap County has been life- and sanity-saving, for me and others.  I've made some great friends there, like Jessica and Naya and Alexis and Adriane and Erin and, well, the list goes on.  And one of the best surprises of all was that I didn't have to make a lot of new friends, I had left behind people who were best friends, like Barbara and Carla.  I didn't love my husband less, I just had other things to do.

But all of that doesn't mean that I don't look forward to duty days still....

The six weeks while hubby was in school really wasn't that bad.  Adam and I got into a routine. Yes, we were tired a lot.  We were hardly ever home. But when we did get home at 8 at night, he was always in bed within an hour, snuggled beside me, fast asleep while I worked or played on the computer.  And that's where the trouble really lies.

Hubby is getting ready to go again, at least for a bit.  And if I said I was dreading it, I would be lying.  In a way, I'm kind of looking forward to it. 

When he goes, Adam and I will once again find our routine.  I'll have what I want for dinner, and I'll probably feed Adam too much junk and fast food.  And at 8 at night, Adam will be in bed asleep beside me.  And where will I be?  Propped in bed next to him on the computer, either returning emails, on the Multiple Listing Service, or here on Active Rain.

You see? When my husband is home. I have to make other things a priority, like making sure he has a clean uniform, or making sure we have food for his lunches, or sometimes I even plan a homecooked dinner.  Many days I try to beat him home, so his family can welcome him home with love, hugs and kisses.  My time to work diminishes a little, and I can see the results of that dedicated time in my commission checks - they tend to be farther and fewer between.

You may have noticed that my dedication to my blog and to Active Rain comes in spurts.  Some weeks I am all over it!  Blogging every couple of days, getting on Active Rain almost every night.  And I like it.  Then there will be weeks with very little activity here.  Hubby's home...

Sometimes I wait for him to fall asleep, then turn on the bedside lamp and pull out the laptop I have stashed under the bed.  I hit the mute button before I turn it on, so it doesn't make that horrible musical-but-not-musical noise when the screen lights up.  I feel like a drunk with a bottle hidden in the bedside drawer.  Real estate in general and Active Rain in particular can be a form of addiction, I'm sure!

So when hubby goes to sea or to a conference or to school, I can spend more time on my career, with my clients and on marketing.  I can spend more time in the office.  In the evenings, Adam and I can come home and pop "Ice Age 2" into the DVD player in my office, Adam sitting in the armchair I put there just for those occassions and I can sit at the computer. 

And at night?  Adam can sleep beside me, and I can blog, comment on others blogs, learn about new technology, new marketing ideas that will help sell my listings and attract new clients.  And I can do it all here, on Active Rain. 

It's been almost eight years now that we've been married.  My love for my husband has not lessened at all.  It has actually grown deeper and has matured.  I can't imagine not having him in my life.  We plan our retirement together, where will we travel, talk about our "someday" waterfront home and which expensive car we will buy then. 

I do look forward to him coming home from deployments and underways, because when he is gone I truly do miss him.  But then, he forgets to take out the garbage, or argues with me about when the car needs to go into the shop, and I find myself thinking, "When do you leave again?"

I have become one of those wives.  When is he leaving again?  I don't love my husband less, I just have other things to do.

Like play in the Rain....

Following the Do Not Call List Rules - Some Examples

I've read several blog pots about avoiding prospecting by phone.  In more than one, the author indicated that they really didn't understand the Do Not Call list.  Rather than risk violating the DNC list, they send letters and postcards instead.

It's a good tactic -- agents do routinely violate the Do Not Call rules and regulations.  Having taken many courses in risk management, I thought I might clarify some of the Do Not Call rules by providing a few examples.

All real estate agents MUST follow the federal laws regarding the Do Not Call list!  Otherwise, you and your company could be hit with large fines.

You decide to farm expired listings.  You arrive at your office at 8 am, and pull the expired list for the last 24 hours.  You spend the next little while searching for the sellers' phone numbers, using whatever resources are available to you at the time.  At 9 am, you begin making phone calls.  Oops!  You just violated federal law!

Even if you do not call anyone whose number is on the list, you violated federal law. How?  Because you forgot to check the list!  Before making phone calls to prospective clients that did not initiate the contact, you must check the list!

You've spent a few weeks calling expired listings. Now you have some spare time in your schedule, so you decide to go back through the older expired listings that have not yet relisted.  It is time to call them again.  Your expired listings are three weeks old.  You checked the Do Not Call list before you called three weeks ago, and you only kept the expired listings that were not on the Do Not Call list.  So, there's no need to check the list again, right?

Correct!  Law says that you must check the Do Not Call list every 31 days.  Since you checked it three weeks ago, by federal law, you are not required to check it again.

Let's say you decide to call on For Sale By Owner properties.  You drive by a home with a handmade "For Sale" sign on the front lawn.  You pick up your cell phone and place the call.  You just violated federal law, again!

That's right, even if the home is for sale, if the seller didn't initiate contact with you, You must check the list first!

Same scenario, but this time you pick up a newspaper and see a For Sale By Owner advertisement.  Since they are advertising, it must be ok for you to call, even if they are on the Do Not Call list, right?

Wrong!  Even if the seller is advertising on a billboard right across from your office, he still did not initiate contact with you specifically.  Therefore, you must still follow the Do Not Call list rules.

For more information on the Do Not Call list rules, click here.

Remember, fines for violating Do Not Call list rules can be up to $10,000.  Don't let this happen to you!  You deserve to keep every penny that you have worked so hard to earn.

I am NOT a Bottom-feeder!

A post by Pacita Dimacali entitled "Bottom-Feeders?"  is actually a post about whether short sales or bank foreclosures are better options for investments.  One of her commenters is quite opinionated on the subject of "Bottom-feeders", however.  This commenter vehemently pushes the idea that agents who represent investors who look for short sale opportunities are flawed individuals with no principles or ethics.  As a matter of fact, she outright calls these people "bottom-feeders".

Really?  Are we?  I am working with a very serious investor now who is looking for short-sale and foreclosure opportunities in Kitsap County real estate.  And I love working with this gentleman!  I enjoy a challenge, and finding just the right property can be just that -- a challenge. But I am good at it -- we have a property under contract right now.

Does that make me as his buyer's agent a "bottom-feeder"?  Is he as the investor a "bottom-feeder"? 

When a seller is in a short-sale situation, it is sad.  There is no question about that.  There are personal and financial tragedies taking place across the country because of the loss in value many homes have experienced lately.

So we make low offers on short-sale properties and the sellers have to deal with that.  But let's look at the alternative, shall we? 

The home sits on the market for two months with no offers.  The sellers lower the price even more, dramatically less than they paid for it three years ago when the market was booming in Kitsap County.  He has lost his job and she is sick and needs medical care -- they must sell.  No offers after four months.  They have received a Notice of Trustee's Sale -- their home is being foreclosed on.  By month six, the house is no longer theirs.  It is now a bank-owned property after being auctioned on the couthouse steps.

Now, would they have been better off if they had gotten a low offer and done the short sale? 

I would argue that investors may actually be helping a seller out of a bad situation. It is not a perfect solution, but it may be the only solution these sellers can get. All you need to do is look at the higher number of foreclosures many areas are experiencing, and you see the proof. 

As the investor's buyer's agent, I can make sure that the investor is properly following federal, state and Kitsap County laws and customs of real estate, and help the transaction run more smoothly.  Having a real estate agent involved in a short sale in more likely to result in a closed sale than if the buyer and seller were doing it on their own.  So perhaps I too am helping the seller out of what could be a much worse situation. Think about it...

If you'd like more information on investing in real estate in Kitsap County, or would like lists of short sale and foreclosure properties in Kitsap County, please call me at 360-689-6836, or email Marlene@RealtyStationInc.com

Calling Manette "Home" - Manette, Bremerton

The neighborhood of Manette is located on the east side of Bremerton on the hill of Point Herron.  Many of the Manette homes have a fantastic view of the water as well as the mountains.  Residents can often see the ferry coming in from Seattle as the sun sets over the Olympic Mountains. Manette real estate has not seen as broad of a price adjustment as other areas of Kitsap County.

Manette was founded as a city in 1891, but was annexed by the city of Bremerton just a few decades later.  It is now a unique and very desireable Bremerton community.

Manette is connected to West Bremerton, the ferry terminal, Naval Base Kitsap and the shipyard by the Manette Bridge.  For more information on the Manette Bridge, see my article "Old-Fashioned Bridge in Manette".

Manette is different from many other neighborhoods in Bremerton due to the atmosphere of the downtown area and the attitude of its residents.  People are proud to be in Manette.  They are proud of the history of the area, and they support neighborhood businesses.

I lived in Manette for many years before getting married and moving to Ridgetop. During my time there, I never felt uncomfortable or unwelcome.  Walking down the street always took longer than it should have because so many people stopped to say hello.  A neighbor brought my trash cans in from the curb when I was sick.  Manette is just, well, home-y.

Many of the homes in Manette were built in the 1930's and 40's, and many of the new homes currently being built have the look and charm that was evident in the homes of that era.  Most yards are pristine, with green grass and flowers all spring and summer.  At the holidays, many of those same homes have beautiful light displays decorating the eaves, roofs and yards.

Manette is home to many churches, including the Manette Community Church, St. Paul's Episcopal Church and West Sound Unity Church.  The Bremerton Senior Center, located in Manette at 1140 Nipsic, provides opportunities for seniors to get out and share enriching education sessions or exercise classes, among many other things.  The Senior Center also allows non-profit groups to utilize their facility as space is available. Bremerton Girl Scouts used the space many times.

Manette is also home to the Bremerton Community Theatre, located just under the Wheaton Way Bridge at 599 Lebo Boulevard. The theater is a fun local theater group offering plays and musicals throughout the season.  Bremerton Community Theatre also sponsors BCT JR, whose volunteers teach young children with stars in their eyes everything they need to know to be a success on stage.

The Sheridan Park Community Center offers programs for both children and adults.  It is located at 680 Lebo Boulevard.  My son has attended soccer lessons there, at the age of three, and will start t-ball next month, at age 4.  They also provide an indoor playground during cooler months two days a week for children under 6, which the Kitsap Moms Meetup group frequently attends.

Manette has everything you need in a neighborhood either in the area or a very short drive away.  Realty Station's office has been in Manette for more than 10 years, the oldest existing Manette real estate company.  If you are looking for a home in Manette, call Realty Station at 360-377-5699, or visit our website.

Old Fashioned Bridge in Manette, Bremerton, WA

The Manette Bridge played a significant role in the building and expansion of Bremerton.  Built during the Great Depression, the Manette Bridge is the oldest of two bridges that connect East Bremerton to West Bremerton. 

In this photo, Manette is to the right, West Bremerton on the left side.  The Port Washington Narrows goes north toward Silverdale.  The Olympic Mountains are in the distance.  (Much appreciation to Capt. Alan R. Beam, USN, ret., for the photo.  Thanks, Dad!)

Prior to the building of the bridge, Mosquito Fleet ferries made the crossing each day to allow families from East Bremerton to go to their jobs in West Bremerton.  If a laborer missed the last ferry, he would have to make an extremely long commute around the north end of the inlet, through Chico, Silverdale, and Tracyton.

Construction on the bridge began in October 1929, and continued until opening day in June of 1930.  The bridge was originally a toll bridge, charging $.25 per car and $.05 a passenger.  The toll continued until 1939. 

Shortly after the toll was lifted, it became clear that the little two-lane bridge would not support the growing traffic burden, and talk of a second bridge began. This resulted in the building of the Port Washington Narrows Bridge, commonly known as the Wheaton Way Bridge, in 1958 as a toll bridge.

At that time, the toll was placed back on the Manete Bridge. Why pay the toll on the Wheaton Way Bridge if you could cross the Manette Bridge for free? The tolls were lifted in 1972 when both bridges were paid for.

Today, residents of the charming neighborhood of Manette use the bridge to cross to West Bremerton, Naval Base Kitsap - Bremerton, and the Washington State Ferry Terminal to commute to Seattle.  Unfortunately, the charming Manette Bridge is currently considered unsafe.  The bridge is scheduled for demolition when a new bridge is constructed, beginning in 2010.

For more information on the neighborhood of Manette, including a list of homes for sale in Manette, Bremerton, stop by Realty Station.  Or visit our website for more on Bremerton and Kitsap County real estate.

Selling Your Historic Home

Selling a historic home often involves more emotion than logic, both for the seller and the buyer.   In order to get the highest sale price possible for your historic home, we may need to go the extra mile.

Do some research into the history of the home, going back to the original owners of the home.  Bill Cherry recently suggested naming the house after the first owner.  Put everything together in a professionally written package for potential buyers.  Of course, as your real estate agent, I am happy to assist you with this project.

Resources for researching your home include these:

1.  Get a copy of your home's title report.  If your home is too old, the original owners will probably not be listed, but it is a starting point.

2.  Visit the County or City Register of Deeds.  This is a list of transactions that involved your home.

3.  Go to your friendly tax assessor and ask for the tax roll on your home. This is a list of everyone who owned your home and what the assessed value was at the time, as well as the property tax on the home.

4.  For additional resources, you might visit your local library or the historic society near your home.  If you are lucky, they may have photos of your home.

5. Once you have the original owner's name, be sure to consult historic guides for the area.  You might get lucky!

Now, time for some marketing!  I would like to suggest using new marketing methods to sell an antique property.  We put up a single-property website with those research results on it, as well as outstanding current photos of the home, any old photos of the home and any photos you found of the previous owners. 

We submit the property to all the listing websites we can, including Trulia, Zillow, Realtor.com, and many others. I have recently added two new sites to my list.

The first is www.HistoricProperties.com.  Run by two women from their computers, these women only allow homes at least 50 years old to be featured on their website,  This site is very classy, professionally presented, and seems to get more publicity as well as more google juice than other sites.  You pay just $50 to have your home or listing on their site, and they do get quite a bit of traffic.

The other website is www.oldhouses.com.  It's the same basic premise as the first website -- even the pricing is the same.  This site consistently showed up on the google search pages right behind the first website. 

For specific information on selling your historic home in Bremerton or Kitsap County, call me at 360-689-6836, or email me at Marlene@RealtyStationInc.com.