Washington Post Gives Real Estate Agents a Black Eye - More Mortgage Fraud Reports

Sheesh! You didn't need this!

While agents like all of you here at Active Rain are working hard to present and maintain a professional, trustworthy image, the Washington Post is making it sound like agents handling short sales are a bunch of crooks.

According to this article, agents are teaming up with investors to defraud both the banks and the owners of underwater homes.

The agents list the homes and find buyers willing to pay fair market value. But they don't tell the bank about those buyers. (I'd have to assume that they also don't tell the sellers, since they also stand to be damaged.)

Then, assured that they have a buyer in hand, their "investor friend" makes an offer for many thousands less and the agent backs it up with a BPO showing that this is the most they could get for that house. They close the sale to the investor, then flip the house to the legitimate buyer.

In the end, either the bank or the homeowner loses, and in many cases it's the homeowner. They're the ones saddled with a huge deficiency judgment. I'll also assume that this kind of listing agent wouldn't do much for the homeowner in the way of "negotiating away" the deficiency.

I love seeing people make money. And I'm all for investors who take damaged houses, repair them properly, and make a good profit when they re-sell. Adding value and creating profit is the American way.

But this kind of dirty dealing gives all real estate investors and real estate agents a bad name. And the Washington Post is simply playing on it to make a sensational story.

The least they could do is say "A small handful of unscrupulous investors and agents..." Instead, they make it sound like this practice is widespread. I think they get the "Sunk Award" for today.