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27 Comments on Banks Now Promoting Mortgage Fraud
We had a bank tell us the other day they needed so much money and when we told them what they were proposing was illegal, they said "We didn't say that, we don't want any one to do anything illegal, we just said it can't be on the HUD" WHAT?
Todd - Sounds like that bank just doesn't understand legal and illegal. Did you set them straight?
Hey, Marte! I included this post in Last Week's Favorites.
Yes, they have been trying this stuff for many years.
I honestly think that the banks should be prosecuted for this type of behavior. It is ridiculous. I have seen less and less of requests for it lately, but maybe because it has come out from under the rug. Great blog!
Hi Marte, I just heard of something very similar to your post. They wanted the money to be paid under the table or with a post dated check but definately off the HUD -1. Our agent refused and asked the other agent why they would even ask !?!?!
Wow - thanks Patricia!
Tni - Thanks. I think so too - but who would do it? Our "authorities" seem to be giving banks a free pass on anything and everything. An agent would have to be pretty outraged to try to do anything about it - think of the time they'd lose from work.
Bill - I think it would be easy for a new or inexperienced agent to get sucked in, thinking that the bank is in the position of authority - so if they propose something it must be OK.
Hi Marte. I've heard of agents being asked to do things like this, and the banks saying unless the agent agreed to it they wouldn't sign off.
Erica - Yes, they hold the transaction hostage. It's pretty stupid, since they lose it all if the buyer, seller, and agents call their bluff.
Yes, when I was young and naive, I used to think that banks and the government always had the best intentions for all. Then I grew up.
Sandi - We've all had to grow up real fast in regard to trusting banks and the government. Now we've got a mess to deal with and who knows where to start?
Marte, I'm actually amazed that you sound shocked by this. Nothing the bank do can ever surprise me again as we've seen them for what they are.
Ray - I don't know why I sound shocked. I'm not - I'm disgusted, and dismayed because I don't see an end to it.
I really wrote this in hopes that young new agents would see it and not be sucked in. If either a buyer or seller got mad, I think it could mean big trouble for an agent, even while the bank got off scott free.
The banks have a financial interest in all these Appraisal companies too - that is not supposed to be legal either.
Gene - It definitely shouldn't be legal.
Did you catch my other mortgage fraud post, about real estate agents and investors? Judging from Chris Ann's comment, that one could also go deeper - involving asset managers at banks.
Marte, to answer your question: We got to where the banks were above the law when the government got involved!
Linda - Yes, that makes sense. Since our politicians and others in government positions are also above the law.
It does tickle me when one of them steps so far out of line that the courts are forced to punish them. Not that I want them to continue criminal behavior, but that I want somebody with enough power to step up and say "You can't do that."
After waiting as a buyer for 11 months, the final and best solution, the so called seller's short sale expert came up with was an under the table payment to a sceond lien holder. At points things were not handled in the best way by the seller and seller's agent, but we were patient and accepted that it could take over a year to take possesion of the property. We were simply incredulous, when the final solution of so many months involved mortgage fraud. The feeling we recieved, is that we are not going along with the way things are comonly done, and we just must not want the property. We love the place, but I educated myself, and in no way want to be involved in an illegal transaction. My wife and I are very patient and introspective people, but this is enough to be infuriating for anyone.
May question is this. If this agent has closed many sales. Is he ignorant or unethical if he does not realize the magnitude of the fraud proposed?
Paul - My opinion would be that the agent is just unethical enough to stick his head in the sand and say "If the bank says it's OK, then it's OK."
In other words, he doesn't want to look at the magnitude of the fraud.
Thank you very much for the response. It is suprising what people can convince themselves of when money is involved. Slowly and surely this will become a better process. Thank you for bringing attention to this issue.
Paul - The banks are good at "illegal" as we've seen through the robo-signing scandal. And that's just the tip of it. They're foreclosing on people without even knowing who owns the note. They forge signatures when it suits them, too.
But it's not new. They feel they're above the law - or it doesn't apply to them. When I was an agent I handled bank owned properties and they absolutely refused to follow state law with regard to offers.
I'd like to think it will all get better, but I'm not at all convinced that they're even trying to make it better.