www.lasvegasmtg.com Report: CNBC investigates Big Bank short Sale Fraud as reported by Diana Olick CNBC Real Estate Reporter. While many of the government agencies investigating the part the Banks and Wall Street had in the financial credit collapse the Banking Regulators, Congress and Financial governing boards are not looking at what Banks are doing in the negotiation for Short Sale Approval. Based on the article Banks are playing a shell game of deception focusing attention away from RESPA rules and regulations that are in place. Three Banks in the article were the subject of the investigation, Bank of America, JP Morgan Chase and CITI Bank.
The claim by some in this article that had been interviewed was that when a second Lien position being held by the above three banks (as well as other banks), they have demanded from either the agent or the sellers a cash settlement outside of the HUD-1 before they would give the short sale approval. If this is proven true, then this is clearly a violation of the RESPA rule. Who will be held accountable the realtors that agreed or the banks and its represenatives that demand to withhold the approval with a blackmail to be paid outside of of the HUD-1? Only time will tell, but it would be my quess it will not be the banks.
The holder of the second lien does not have to accept the short sale offer, but if they don't then the second lien holder will force a foreclosure as the short sale cannot go forward and will not receive any money. As I'm not a Realtor I was astounded to hear that this practice is going on even though it is illegal. I think everyone should read this article and listen to the video clip "the Big Bank Short Sale Fraud".
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