I was referred by a client to a friend that desperately needed to sell a home. The owner had received a ‘Notice of Default' and was suffering extreme financial distress. The home had been purchased as a real estate investment at a ‘No-Money-Down' friends and family party. The invite was similar to a Houseware party and the atmosphere was comparable to an auction.
The only two conditions the buyer had to meet were prequalification of credit and a pre-established fico score. The Buyer had a choice of several properties that were offered sight unseen. Another twist was that the current seller would retain residency as a tenant and pay the new buyer cash at closing in exchange for a lease with option-to-buy (back) in one year.
The R.E. broker acting as a Dual Agent was also the Lender. Finally, the Broker had one more hat. He was also the Property Manager. Supposedly, he also handled the collection of the mortgage payment.
Based on the Lender's statement the mortgage payments had never been made.
My first observation was that the house had been considerable overpriced, even if it was in the best shape. Unfortunately the house suffered from years of neglect. It was overrun with years of rubbish both inside and outside. It was a nightmare of the worst kind.
A legal matter, more than likely, but my question... is it a Case of Fraud, Foolishness or Greed?
;)
Links;)
Tags (Tag Cloud);)
Archives
Dionne on the buyers part it was greed trying to get rich quick without doing their due diligence. How can you buy a property sight unseen?