DANGER, DANGER WILL ROBINSON !
BANKS ARE GETTING INTO REAL ESTATE THROUGH THE BACK DOOR - SHORT SALES ! !
* * * * HARD CORE REAL ESTATE TALK * * * *
HEARD ON THE STREET ! !
This was the first I'd heard about it too and my source is impeccable.
HEY, ALL OF YOU SHORT SALE "EXPERTS" OUT THERE.
What if I told you that the banks were in the process of establishing procedures to control the owner/sellers' selection of LISTING AGENTS used to list and sell their home AS A SHORT SALE?
PICTURE THIS. . . You are a home owner in distress. You lost your job and exhausted your savings keeping your mortgage payments current for more than 6 months. You did everything you could to save your home but your new job doesn't pay enough for you to manage your mortgage payment. You tried to get your loan modified but after doing every thing your mortgage compay advised, you are now four months in arrears, loan modification was denied and you have no more savings. Your mortgage company suggests that you sell your property through a short sale. You tried a Short Sale months ago but it never got to closing.
THE POST OFFICE IS KNOCKING ON YOUR DOOR.
Your heart is in your throat, but you know you have to answer the door. The post office delivers a CERTIFIED letter to you. You sign for it and, when you have the envelope in your hands, you see that it's from your mortgage company. You open it knowing it's probably a notice about the pending foreclosure. With shaking hands you read the letter. WAIT! This letter is recommending that you reconsider a Short Sale transaction. Included in the package from the mortgage company that begins with "IT'S NOT TOO LATE" are:
1. A notice advising you that you will receive a $20,000 incentive for a successful Short Sale transaction.
2. A list with the names and contact information of REAL ESTATE AGENTS/BROKERS!
Question: If you were a home owner on the way to foreclosure and you thought there was no hope, would you find the offer of a completed Short Sale with a $20,000 "Fresh Start" check attractive??
Question. If you were a home owner on the way to foreclosure and your bank advised that you could still sell your home through a Short Sale, would you be inclined to contact one of the agentson the list even though you've used someone else in the past??
WHAT IS NOT INCLUDED IN THE CORRESPONDENCE FROM THE MORTGAGE COMPANY ARE:
Advice that you have the right to select a real estate agent of your choice to list your home for sale.
Advice that you have the right to contact an attorney for legal advice in connection with a Short Sale.
Considering the almost complete lack of real estate knowledge of the average home owner on the way to foreclosure, wouldn't this letter from the bank offering an incentive of $20,000 for a completed Short Sale sound like a LIFE LINE??
Considering the almost complete lack of knowledge of the average consumer about AGENCY LAW, wouldn't it appear that you would be required to use the services of one of the real estate agents/brokers included on the list??
ALERT! ALERT! ALERT! From information received and believed to be accurate, THE NAMES ON THE AGENT/BROKER LIST ARE ALL REO BROKERS. These are the same agents/brokers who are used by the banks to represent the banks in the sale of bank owned properties.
Question: Why are the banks tacitly recommending REO specialists to handle Short Sales?
Question: Whom will the agent represent?
Question: Will the agent enter into a listing agreement with a duty of fiduciary to the owner/seller?
Question: What do the banks hope to gain by recommending agents/brokers on their REO list?
Question: Will banks be more inclined to approve a Short Sale if the listing agent is on "THE LIST"?
Question: Will agents on the list be in a position to handle volumes of Short Sale listing like REOs?
Question: How much CONTROL over the short sale transaction will the bank have?? More? The same??
Question: Is there a conflict of interest when a bank recommends a listing agent to a seller?
FOLLOW UP POST OF May 17, 2011. THE PLOT THICKENS! BANKS ARE NOW CALLING REO AGENTS TO LIST SHORT SALES!!
"Honey, are we supposed to use an agent on the list from the bank?"
"It looks that way to me Dear. They're going to pay us $20,000."
"But, our agent worked so hard when we tried a short sale before."
"I know she did Dear, but we can use this money to pay moving and rent for about a year."
"I don't know any of these agents and some of them are pretty far away."
"They must be good Dear if the bank is recommending them."
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.