Maybe some time in the “Big House”, and a reduction in your 401K.
Brokers, do you hae a listing whereby you find out there’s someone who owns “an interest” in a property you have listed, but that person is not on title? Ask your agents. They don’t volunteer this willingly till the offer comes in and the Seller says, I’ll have to get with Joe, and let you know”. You need to be involved here.
Brokers, find out if your buyer agents have an offer in on a Short Sale that has an Option-Holder (who is not on title). Your agent may not understand what is going on. You need to be involved here, too.
Is an Option illegal? Not usually.
But, it is if the purpose of the Option is to circumvent state licensing laws or to defraud the lender from reaping the most possible from a Short Sale.
Question: If a lender agrees to short a loan of $200,000 by writing off $50,000, and accepts the buyer-seller agreement, no problem. What if the lender agrees to this agreement, only to find out that there was a simultaneous closing that was for $10,000 more than what the lender received? Who pays the $10,000?
You and me. Yes, the losses are what we the taxpayers shell out through the Feds to make up all the bank losses. If there were only a $40,000, instead of a $50,000 write off, we would not have to shore up the banks any where near as much as we will if the short sales continue to have so many hands in the pot.
Would the RTC hae done a better job of clearing the market of toxic assets?
Real story: one of my agents and I were doing an Open House at one of our listings. Sheepishly my agent told me that the property was scheduled for a Trustee Sale. Note: In AZ we use Trust Deeds and a non-judicial foreclosure period of 90 days from filing of the papers to the Trust Sale. Agent unsure of date. So, will the Seller agree to go through the process of filling out and submitting to the bank, short sale papers, ask I? I couldn’t get a straight answer and had to get out my pliers.
“Why hasn’t the Seller spoken with the lender and asked for a packet if she’s without a job and cannot afford to pay the loan on this 2nd home?”
“The Seller did what?” Gave 1% interest in the house to a man she hardly knew to do property management? Unlicensed?
Yes, the story goes down hill from here. My agent then continued to tell me that that same “property manager” was going to remove the cabinets the following week.
Some of you don’t know me… but by now can guess…
I said, “you call the Seller and tell her that if one cabinet is removed from this property I will make it my life focus to make certain that the person removing the cabinets spend time behind bars!” I should have been more inclusive. The next week the cabinets were there but the light fixtures, appliances, etc. were gone.
That agent is no longer with me.
People, that is mortgage fraud!!!
Dick Fryer is a member of the Floride Real Estate Commission and he believes, as do I, that real estate professionals are eventually going to find themselves in a world of hurt just by turning a blind eye to the hanky-pank that’s taking place. By the way, the term “wholesaler” is a synonym for “dealer”.
Here’s what the AZ Attorney General Terry Goddard just filed:
Brokers, ask your license law officials about these issues, call your attorney and discuss transactions like this with him/her, and for heaven’s sake, get involved with your agent’s short sale and Rent-to-Own transactions. Look at me, sounding like the lady in the drug ads telling parents to get involved.
Must get back to writing the AZ CE course… look for a post about the “Shrink-Wrap House”… more on short sales, AZ’s amendment to the anti-deficiency judgment statute, and bankruptcies.