Julie, I would say keep your broker fully informed every step of the way. Check your (or the broker's) E & O insurance.  Talk to an attorney on your own just to be prepared.  Cooperate fully with both buyer and seller so that neither of them becomes suspicious of you.  See if your state, like Pennsylvania, has a Realtor(R) legal hot line that can give you advice.

Make contemporary dated notes of all your actions and all their actions so that you can refer to them later. 

WOW that is Fraud and if it were in Virginia I would not be surprised if someone ended up in jail. It will be interesting to hear how that works out! keep us posted....cm

I think you mean to say "buyers" here?  appears the sellers never signed the addendums

If the buyer's agent has reimbursed the buyer, what are the grounds for a lawsuit?  I can see criminal prosecution for forgery and fraud ... but what would be the basis for a civil suit?  (I'm not debating, just asking ....)

I think I would be sitting down with my broker and the firm's lawyer.  I would be working up my notes and making sure I was very accurate in everything that happened.  I might never need to have all of the info, but I'd hate to be trying to remember it two years down the road. 

You're right, I did mean buyers there. Sorry, hope I didn't confuse anyone.

I believe they are suing for the lost marketing time stemming from the fraud (8 weeks in the summer for a 4 BR home-not too many families looking now that school has started here in AZ), the sellers are in a contract with a builder with $7500 on the line as their down payment, which they will likely lose since this deal has fallen through. They wouldn't have been allowed to write that contract except the buyer's agent represented his buyers as having excellent credit and being pre-approved. This was certainly not the case.

Truthfully I am not sure what they plan to charge in their suit, but I will certainly cooperate. The buyers really aren't in a position to qualify for a loan and a reputable agent wouldn't have misled them. I am not advising them to sue, but will cooperate with any suit they do bring. I think they have grounds to file an ethics complaint and possibly criminal charges. Not sure how they should proceed with that part of it. The AZ Dept. of real estate would probably be a good place to get advice and I plan to call them Monday.

Real Estate is an exciting career, don't you agree? :D

Hey Julie,

Unfortunately the borrowers and your sellers now have a bad taste in their mouth for any Real Estate Transaction.  Fraud is running rampid all over the country, and yes you should report both of them to the Department of Real Estate and the FBI.  It is a serious matter and everyone is so tired of these people taking advantage buyers and sellers.  The only question I have is as a Loan Officer myself, I only receive the contract faxed to me after it is fully executed, so how would the loan officer get your fax and then sign it Did he represent the buyer as a Realtor and a Loan Officer?  Anyway, those of you that read these blogs, the earnest deposit should be explained very carefully to the clients ( Seller & Buyer), and if financing falls apart at the end, I'm certain that the buyer still receives the earnest money.   I'm not quite sure if and when your buyer was supposedly qualified by this Loan Officer, but as of Jan. 01 2007, several loan programs went by the wayside, and they are continuing to go by the wayside.  This is not an excuse for what they did, but more so that ALL Sellers should know that Selling Real Estate is a risk and more so the earnest deposit is a formality.  Did the Real Estate Agent Cure the loan per the contract after they missed the closing date?   Did you ask for the Cure?  The Az Department of Real Estate requested the LSR & LSU, and if closings are going to be missed the Buyer must Cure and find alternate financing.  If these rules are in place, I would bet as I know that as I put together transactons for buyers I get a call from the listing agent saying WOW this is the First LSU I have received.  Did you receive any LSU's through the transaction?  It is to bad for you and both the seller and the buyer.  I hope your seller was able to list and got an offer.  Keep them positive, if you receive another offer on their home request that you have the buyer contact your lender as a precaution. 

Should the buyer get the deposit back? Yes I think they should why, because it is the RIGHT THING TO DO!  You will sleep at night and so will your seller.

 Make it a Great Southwestern Day!

Chris Davis

I didn't go into too much detail above, the forged documents are actually the addendums to extende the COE a week at a time for 3 weeks. In those addendums I included that the buyers were waiving their rights to receive the earnest $ back if it didn't close by a certain date, and that there would be no 3 day cure period. We were receiving updates from the realtor and lender consistently saying they were working the loan, but at 100% underwriting was getting tougher and there were conditions they were working to satisfy. "We can get it done, we just need some more time". The lender seems to have been in cohoots with the agent and work in the same office (even answer the same phone). It seems they charge outrageous origination fees, a point to the seller and buyer, and get people into loans by duping them, that they can't afford and can't honestly qualify for. The agent doesn't want to take responsibility for the forged addenda (and there are more than 1) and is blaming the lender. What agent has his lender get the client's signature on legal paperwork? It's our responsibiliity to communicate and explain and get the contract and paperwork fully executed. But, his only defense is "I didn't do it".

It's really remarkable that these buyers are still haning in there and trying to get in a position to buy a home instead. They want to work with me to find one. This is the craziest way to pick up a buyer I've ever heard of!

If anyone out there was interested I have an update for my fraud case.

The buyers (whose signatures were forged) tried for months to be approved, but between income, debt and credit there were no programs left in AZ for them. So, they continue to rent and are trying to save and pay things down.

The sellers were stuck for many months trying to sell the house during a declining market and finally were able to work a deal with a friend. They lost about $40,000.00 through this process. They are currently suing the listing agent and brokerage.

The day after the sellers filed their lawsuit, the listing agent and broker (the ones who perpitrated the forgery and then lied etc to cover it up) brought an ethics complaint against me with our local REALTOR board. It was ludicrous and they accused ME of forging the documents, and that I conspired to have my husband write the new loan (he's not even in mortgages) and I "stole" their buyers from them. This, as you can guess, didn't sit well with me.

I prepared a heck of a rebuttal, which included my efax call log showing the forged documents were sent, 3 different documents btw, from the listing agent's home fax. Not surprisingly, the complaint was dropped by the ethics committee.

I filed a complaint with the AZ Dept. of Real Estate back in Oct/Nov and still haven't heard anything from them. They told me that forgery isn't within their jurisdiction and I needed to report it to the local police or the FBI. I haven't done that. But consider it from time to time.

Anyway, I just wanted to post this update. I did receive an email comment asking for updates and am finally getting around to it. S

Some days it just doesn't pay to be a REALTOR, then other times I just love what I do!

Julie, it's a good thing you do things right by the book.  Just when you think, well, I can do this or I can do that and no one will know, it'll jump up and bite.  The minute I get an agent calling to submit and offer, I let them know that I'm extremely anal and I do things right by the book.  If problems arise, it will be on their end of the transaction and I'm not big on surprises.  Most get what I'm saying even though they may not like it. 

In this case it wouldn't have mattered.  It appears you have serious fraud going on and the three of them are in cahoots.  Unfortunately, litigation, or the threat of it, is likely your client's best option.