Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372




This was the first I'd heard about it too and my source is impeccable.


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.   


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??


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?




 "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. 

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Comments (97)

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Pat.  We do have some in our area, but they always defer to the banks.  If they simply answer their phone, they're great.

I have found Fannie and Freddie agents to be excellent.

William.  Funny. 

May 14, 2011 07:52 AM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Lenn- while I'm not a Realtor this affects so many people and I don't like to see sellers being backed up against a wall.  I agree with the way its written it looks as if a seller would have to use the recommended agent if they want the short sale.  I'm putting links to this on my FB and Twitter for you.

May 14, 2011 08:27 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Kathy.  Thanks for the great syndication.  Love it.

Erica.  Sounds like she's not working for the seller to mitigage the loses and not for the bank to get a higher price.

May 14, 2011 09:10 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Lenn:  I love that you in particular made the effort to sound the warning regarding this news.  MORE people will see it and be aware.  I do have to say though ... none of us should be surprised at this.  Let me see.  A bank trying to find another new angle to turn lemons into lemonade money and profit for themselves?  At their clients' expense?? 

What galls me about this too, is two-fold.  There will be either:   fellow industry members ready, willing, and able to throw their brother-agents to the wolves ... and lining-up at the doors of the banks to be listed as their preferred agent at reduced prices and commissions.  Or just as we are finding currently within the lending end of it, the banks will somehow circumvent the licensing needs and etc. of agent representatives allowed to "sell" the properties.  Lenders working for the big banks do not need to be licensed, have the same education, be fingerprinted, or have their credit checked.  Will we see the same occur with these agents??   If so, we know how that typically plays out for consumers.

Sound the alarm Lenn ...  people need to be aware.  Action needs to be taken ...


May 14, 2011 11:53 AM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Lenn - Thought provoking post.  This issue is just another example of challenges and issues that will face the ever changing real estate industry.  I wonder what things will look like in 10 years?

May 14, 2011 12:40 PM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

And it looks like the banks will be in the business for years to come !!!!!!!!!

May 14, 2011 12:52 PM
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX

Lenn, this comes as no surprise. Banks have been trying their best to get into the real estate business for years. And... everytime tha have had a major hand in trhe business we've ended up with disastrous consequences. I started in this profession during the S&L crises and if that was not enough to make everyone sit up and realize that it will never work...well, what am I saying...Looking at the current mess!

Banks will never stop trying and we should always do our best to support efforts to the contrary!

May 14, 2011 12:55 PM
Laurie Mindnich
Centennial, CO

Lenn, perhaps for those Realtors who have worked a short sale in the recent past, with no results/an expiration, the time is right to contact former clients, and make clear that short sale services are still offered- and the $20k or whatever it is will apply- "the list" isn't required for the $20k.  Time to hit the phone.

May 14, 2011 01:48 PM
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease


OMG! It is mind boggling to say the least.  I love all the things I learn here, if even I don't love the news!

All the best, Michelle

May 14, 2011 02:00 PM
Tim Peterson
Wisconsin Realtor Safety and Concealed Carry Classes - Madison, WI
Realtor Safety Training Classes

Hi Lenn-no I have not heard of this either-soon the banks will just get brokers licenses and put us all out of business

May 14, 2011 02:27 PM
Jon Quist
Tucson's BUYERS ONLY Realtor since 1996

These banks are the major players who control most of the loans now out.

Citi, for example, is teaming up with Keller Williams. The other big banks are doing the same thing with other major players, or so I believe.

Since I never take listings I would not get any of the leads anyway, but my buyers will certainly benefit by considering short sales by these banks, because the banks have in essence guaranteed the seller $$$$ to do a short sale. They will then not come along and screw up the short sale, like they do now. That would just make no sense.

More short sales lead to less foreclosures, that are often abandoned wrecks. That can't be a bad thing.

Distressed sellers win. Buyers get more choices of distressed yet clean, still lived in, unwrecked houses.

There is always another side to any story.

May 14, 2011 06:55 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Gene.  Thanks.  You GOT IT!  You should reblog my article and post your comment as the introduction.  Lenders throwing agents to the wolves and agents throwing consumers to the wolves could easily be an article to itself. 

Jennifer.  I suspect that the financial industry will be in control of the real property transfer of title process.

Michael.  That was never in doubt.

Russell.  I remember the S&L crisis well.  It was different in that it didn't reach into the average family.  RTC was not remotely similar to TARP.

Laurie.  I'm sure many have already done that.  However, is that not simply asking for a repeat of the same transaction failure??  Why didn't it transfer the first time with that agent??  Many of the properties have already gone to foreclosure.

Michelle.  Don't hate the news.  It's just a door bell ringing.  It's events that the news brings that we hate.

May 14, 2011 11:15 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Jon Q.  As a buyer's broker, I understand your focus, on the buyer.  That said, with sellers agent co-opted by the banks, do you really believe that buyer representation will have any place in these transactions for very long??? 

I see the possibility of a serious conflict between the state license laws and the banks.  License law (with the very notable exception of dual agency) generally operates to protect consumers.  I fear that consumers will be the last thing on the minds of the banks when they control the listing process.


May 14, 2011 11:24 PM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

I'm sorry, aren't there enough bank-owned realtor out there selling their REOs.  They now want to spread their incompetence thinner into a bigger pool????

May 15, 2011 05:34 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Jane.  It would appear so.  However, timeliness has never been, isn't now and probably never will be a bank's goal.

May 15, 2011 10:47 PM
Kelly Turbeville
Keller Williams - Lake Forest, CA
Turning Real Estate Dreams into Reality

First - it disgust me that after months and months of delays the lenders now will come and pay an incentive for the homeowner to move.  $20k - $30k wouldn't that be great to help homeowners come current and keep their homes.

Second - Where are our Realtor Assocations Leaders?  NAR, CAR, OCAR here in California.  NAR approved a 50% increase and yet this stuff still continues to go on.

The only advise the lenders should be giving their customers is to get speak to multiple Realtors who can best represent their interest.



May 16, 2011 12:51 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Kelly.  OUr NAR, et al., are busy designing a new TV ad that touts "It's Time To Buy".


May 16, 2011 10:18 PM
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

Thanks Lenn,

One of my clients actually gave me one of these letters from Citimortgage that does indeed have 6 Suggested REO Agents to use for a short sale and an offer that "They May Receive up to $3,500 in Relocation Assistance"..

There is a disclosure -- From the Letter:

"For Your Convenience and for Informational purposes only, we have included the folowing list of real estate agents* in your area. Please remember, this information should not be considered an endorsement or recommendation by CitiMortgage for any specific real estate agent or agents. You may use the real estate agent of your choice."

Six Agents and their Brokerages Listed that all appear to be REO agents from what I know.

At the Bottom of the Letter:

* CitiMortgage is not affiliated with the real estate agents listed above. We take no responsibility for and make no guarantees regrarding the quality of the services you will receive.


May 19, 2011 07:37 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Paul.  Considering the number of agents in any given area, by simply being on a list is an endorcement.


May 19, 2011 07:51 AM