As an REO (Real Estate Owned) real estate agent, I’ve faced numerous challenges, but being sued by a homeowner for offering cash-for-keys and wrongful foreclosure takes the cake - especially when I'm not the bank. The situation becomes even more bizarre when you realize that this homeowner was collecting rent every month from the tenants but wasn’t paying the mortgage, leading to the foreclosure in the first place.
Offering cash-for-keys is a standard practice in REO transactions. It’s designed to help tenants transition out of a foreclosed property smoothly and avoid the drawn-out, often contentious eviction process. It’s a practical solution, aimed at minimizing disruption and ensuring the property is handed over in good condition. My role here is to facilitate this process, not to make any decisions about the foreclosure itself.
The homeowner's claim of wrongful foreclosure is where things really get frustrating. As an agent, I have zero control over the foreclosure process. My involvement only begins after the bank has already foreclosed on the property. The idea that I could be held responsible for the foreclosure is not only absurd but also shows a fundamental misunderstanding of how this process works.
The homeowner erroneously filed the lawsuit where she lives instead of where the property is located. To complicate matters further, she went so far as to file a restraining order against me to keep me away from the property. I was forced to hire a California attorney - at a cost of $3,000 - just to walk into a courtroom and explain to the judge that, as a Hawaii resident, the plaintiff had no jurisdiction over me. It was an unnecessary and costly step, but one that was essential to clear my name from this baseless legal action. Any action concerning a mortgage is not covered under our Errors and Omissions policy, and the bank would not reimburse me for this because they consider it “a normal business expense.”
Luckily, I was quickly removed from the case. This experience has been a stark reminder of the misconceptions that exist about the role of REO agents. It’s frustrating to be dragged into legal battles that have nothing to do with the job you were hired to do - and then have to pay thousands of dollars when you are completely innocent. I’ll continue to focus on providing the best service possible, despite the occasional legal curveball. It’s all part of the job.
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