Yesterday, I attended a seminar on money laundering, by the Washington field office of the FBI.
That's the good news!
The bad news is when I asked the agent about short sales, in particular, 2nd lien holders pressuring agents and homeseller's to pay the lender "off the HUD" to make a deal go through, she didn't seem to understand the short sale process, and thought it was HUD's jurisdiction.
Now bear in mind, I'm not talking about inadvertent typos, or a home or pest inspection that was already payed for, we are talking about large financial institutions using "undue influence" to strong-arm agents and homesellers's to commit loan fraud.
The sceme goes something like this:
Homeowner does not qualify for a loan modification, due to legimate hardship. Homeowner, with more than one lien on the property puts their home on the market as a "short sale". The short sale package, and a "ratified contract" is delivered to lien holders.
The first lien holder, after many months, agrees to the short sale, however, the 2nd lien holder, who gets very little in the process, demands say $10,000 to release the lien. The first lien holder, again after more many moths, decides to pay the 2nd lien holder $7,500.
So far, so good.
However, not soon afterwords, the listing agent gets a call from the 2nd lien holder "instructing" the agent and homeseller (who by this time is running out of money), to "come up with $2,500."
Sound reasonable? Well the homeowner (and by now the agent) don't have that kind of loot laying around, and ask the 2nd lien holder to accept less. The homeowner and listing agent are "instructed" by the bank to come up with the remaining $2,500, by "any means necessary".
Problem is, if it is not disclosed on the HUD-1, it is loan fraud.
I thought the new guidelines on short sales were supposed to speed up the process, and make things run smoother. Evidently, the large financial institutions involved have once again thwarted reform, and are now blaming homeowner's and agents for their "improprieties".
Not even one month into a new HUD-1, and GFE form, and unscrupolus individuals are already finding ways around it!
I haven't had this happen to me personally, however I have heard other agents complain about this, but afraid to come forward out of fear of retribution.
Have you been bullied by the banks to things that you didn't think were "kosher"?
Even if you are afraid to come forward here, the FBI has a tip line at www.fbi.gov
Sooner or later, this is going to hit the fan, and I don't know about you, but I don't like the prison "decor".
What do you think?