DEED IN LIEU - PRESERVATION COMPANY FRAUDULENT BILLS - WATCH OUT!

I just can't get a day of rest! One of my clients had a rotten experieince this week with a home inspector.

REDC, the California company that does default solutions and auctions for lenders, has gotten a nice niche for doing home inspections for lenders just prior to the lender accepting and filing a deed in lieu of foreclosure.  They hire local inspectors and contractors to review the interior and exterior of the home and make necessary remedial actions if necessary.  The problem is that some of these inspectors are criminally fraudulent - and they are not only ripping off the distressed homeowner, but the banks too.

For example (dates and names have been altered for anonymity) - Renee, a client of ours agreed to a deed in lieu proposal from Bank of America on her $300,000 plus immaculate home in Palm Beach County, Florida.  The lender encouraged her not to do a short sale and instead to do a cash for keys deed in lieu which would have put over $6,000 in her pocket for moving out.

The DIL requirement was for her to sign the documents and be out by June 15th, and she did so and was out before then and continued to pay the HOA, electric, run the A/C and pay the gardener.  The inside was left "as new" clean.

The REDC inspector then came out the second week of July and found and charged for smoke detectors (the house has an alarm system with all required smoke detectors), hazardous material handling and disposal (they threw out the purposely left small cans of paint for touch up), dehumidifiers (the a/c was left on 80 degrees and all a/c central units were working perfectly), and outside trash removal from the gardens (the house is impeccably maintained outside by a weekly gardener).  All this cost the homeowner through a direct reduction of the "cash for keys" payment, with no room for dispute or argument with REDC or the lender - "take it or leave it"!

These "PRESERVATION COMPANIES" have it sweet - often they deal with abandoned or walk away homes or borrowers that just don't care anymore.  Lenders are relying on the outsourcing company and don't have a check and balance system for their billings.  One Preservation Company contractor told one of our clients, "Without my even telling him what was on the bill, he told me they automatically add bogus charges such as dehumidifiers, smoke alarms, strapping down outside air conditioners, and charges for removal of documents (such as the appliance manuals and condo documents left in a kitchen drawer for the new owner). He told me unbelievable stories of being paid to add a smoke detector to a room that already had 5 on the ceiling."

Since these are (and in this case was) a lender federally insured by the US government, the conduct by the contractor inspector and condoned by REDC is outright fraud on you and me!  Such conduct is probably also bank fraud, but I will let the experts decide about that issue.

BE CAREFUL WITH HOME INSPECTORS SENT BY LENDERS!!!!  They probably are not on the side of the homeowner and they being human are only trying to make a buck ... or three.

Copyright 2010 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 begin_of_the_skype_highlighting   email: RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com  New Website www.Florida-Counsel.com. 

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