REO Fraudster Goes to Jail

These are the crimes and attitude required to actually go to jail for real estate fraud:

A former Fannie Mae employee will spend more than the next six years in prison after being found guilty of accepting more than a million dollars in bribes and kickbacks in exchange for selling Fannie Mae-owned foreclosures for less than market value.

Back in January 2018, Shirene Hernandez was charged with accepting bribes for steering foreclosures to certain brokers and even allegedly buying some foreclosures herself at below market value.  And nearly a year ago, Hernandez was found guilty of two wire fraud counts that involved the deprivation of honest services as a result of the scheme.

Hernandez formerly worked at Fannie Mae in California as an REO foreclosure specialist and was tasked with the sale of properties foreclosed on by Fannie Mae.

As a sales representative, a position she held from 2010 through 2015, Hernandez would assign Fannie Mae-owned properties to certain real estate brokers and approve sales of the properties based on offers the brokers submitted.

But, court documents showed that Hernandez demanded and received bribes – mostly in the form of cash – in exchange for brokers getting the listings and commissions those brokers earned on real estate sales in question.

Hernandez also approved sales of Fannie Mae REOs at discounted prices to both herself and to brokers who paid her kickbacks.

As part of the scheme, Hernandez also received bribes for approving below-market sale prices of Fannie Mae properties to the brokers, all of which were violations of Fannie Mae rules and federal law.

Hernandez also helped several family members become Fannie Mae-approved brokers, and then steered nearly $80 million in Fannie Mae listings to them, resulting in nearly $2 million in commissions in less than three years.

According to court documents, Hernandez received more than $1 million in benefits from the scheme, including cash kickbacks and equity in a Fannie Mae property she bought using said kickbacks.

And, according to court documents, Hernandez paid for that property using a duffle bag filled with $286,450 in cash, which she gave to her sister-in-law to bring to the closing.

“The crime that [Hernandez] committed was egregious,” the prosecutors wrote in their sentencing memorandum. “Rather than act in the public’s best interests…she used her position to line her own pockets. [She] is unremorseful and unrepentant, and would seemingly do it all again if she could avoid being caught.”

In addition to the 76-month prison sentence, Hernandez was also ordered her to pay $982,516 in restitution to Fannie Mae.

Link to Article

California Net Migration

The number of people moving is half of what it used to be.

The gap between who’s left California by major van lines, and who’s arrived, is now at its widest in 13 years.

Every January three major van lines put out data on their state-to-state moving business. Such interstate moves by van lines are a shrinking migration niche for folks with deep pockets. Corporations have shied from paying the pricey tab for professional relocation services. Not to mention that Americans overall aren’t relocating like they once did.

Inbound moves: The state’s real problem. Americans may visit the Golden State, but don’t want to live here. So just 19,196 inbound van moves last year vs. 22,492 in the previous year — down 15%. Last year is 37% below the 16-year average. Census data for 2018 showed the total number of Californians arriving from other states was the lowest in five years.

Outbound moves: Departures, a focus of the grand California “exodus” discussions, are falling, too. Last year’s 23,595 outbound van moves were down 8% in a year to 25,618. Last year is 27% below the historical average. Census figures for 2018 show Californian’s total departures rising for the seventh consecutive year.

The “net” result: Last year California suffered 4,399 more outs to other states vs. arrivals, the largest since 2006, and up from 3,126 in the previous year. Since 2004, California has averaged a net van-line outflow of 1,731 a year. By Census math, California’s total “net outmigration” was at its widest gap since 2009.

Link to Article

Median SP:LP

The SP:LP ratio has been very consistent for those selling a home under $2,000,000 – you can expect to get pretty close to your asking price.  Above $2,000,000 is a different story.

Mortgage rates had averaged 3.99% in 2017. You can see how the lower-end buyers became less concerned about getting a discount as rates started rising in early 2018 (they reached 4.59% in May, 2018):

This is another place that listing agents manipulate the data. When marking their listings as sold, many will lower the list price to match the sales price in order to make it look like they sell their listings for ask.

New Agent Reality Show

Hat tip to SM for sending this in!

The “hideous” couches have to go.

And that isn’t the only request Beverly Hills-based realtor Aaron Kirman makes to the owner of an oceanfront Dana Point house on CNBC’s new “Listing Impossible,” which premieres at 7 p.m. Wednesday, Jan. 15.

The eight-episode real estate series produced by Authentic Entertainment, a division of Endemol Shine North America, follows the powerhouse agent and his team as they take on big-ticket homes in Orange and Los Angeles counties that have languished on the market for too long.

“I am up against people that are winning and losing every day, and I felt like the world doesn’t see real estate in an accurate way on TV,” said Kirman, president of Compass’ luxury estates division who in 2019, alone, sold $500 million in real estate. “I wanted to show sellers mistakes not to do, so they could win, whether they live in a multi-million-dollar house or a $60,000 trailer.”

The series, filmed from late 2018 into spring 2019, features the jaw-dropping homes of attorneys, business executives and celebrities who aren’t used to being told what to do.

Kirman knows how to break a hard-to-sell logjam with high-priced staging, landscaping and lowering the asking price. But that hard truth is greeted with stunned looks on the faces of his potential clients.

And, naturally, there’s pushback.

“Aaron, they’re not that bad,” Renetta Caya, owner of the Dana Point property that was listed at $13.9 million for three years without one offer. That was before Kirman and his team entered the picture and told her they didn’t like her couches.

“They’re pretty bad,” Kirman insisted.

The house sold in October 2018 for $8.807 million, property records show.

Link to Article

Inventory Watch

There are 631 houses for sale between La Jolla and Carlsbad today, which has to be an all-time low (in an area of 300,000+ people).  The median list price is $2,550,000, which is probably an all-time high!

The new offerings are barely trickling in too.

Of the 76 new listings this week, 54% were on the market last year.

But we’re due for liftoff!  It was about this time last year that the number of pendings start to increase, and rates are much more favorable in 2020!


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