I don’t want to beat a dead horse – we know that realtors are committing fraud and deceit. Here’s an example of one guy, the previous listing agent of this house, who has been inputting short-sale listings onto the MLS for the last 1+ years, with the vast majority (over 75% of them) marked pending or contingent immediately.
If your clients are getting what they want, then maybe you can sleep at night. But when just as many of a broker’s listings are being foreclosed on, as are selling, there’s a problem:
Keep up the good fight, Jim!
If representing both parties in a transaction works so well why don’t lawyers do it in court?
If these houses were just foreclosed on there wouldn’t be problems like what Jim’s described.
Just from watching the mls if seen all kinds of this type of thing. Buyers are getting screwed.
Yup, seen questionable tactics like this on the mls as well. Can you call these deuchbags out by name and expose who is acting like this. We may not be able to stop them, but it can’t hurt to hang their dirty laundry up for all to see.
Fraud? What fraud?
Maybe someone should call the banks and let them know what is going on with their money. The problem is you may find the bank asset mgr getting kickbacks from these agents.
I also reported on a previous Jims comments about the broker on Portofino last week (92054) that had a sign out for a week with nothing in the MLS. One day showed up as active, the next day pending.
There are some bad apples and the board does nothing but charge agents money.
What happened to the rock house? Someone buy it? Develop it?
Love the “collision” 🙂
Can’t the banks sue the agent?
Here’s another…1428 Kings Cross Dr, Cardiff 92007, marked contingent within a couple of minutes of listing input. The agent wouldn’t return my phone calls, Trinity Homes & Investments.
Kings Cross is listed with the same company that has the one on La Costa Ave for $800,000, about half of what the bank wants.
The La Costa Ave agent called me after one of his potential buyers saw it on the video last week. We had a heated discussion, and I got the feeling that it never crossed his mind that what he is doing is unethical, let alone a breach of his fidicuiary duty to his seller. He had open house, found buyers, and then inputted the listing in the MLS, then marked it contingent immediately.
Do you think that’s the type of guy that’ll ensure that the waiver of deficiency judgement will be included?
The rock house isn’t for sale, they’d take a million but what would you do with it? The youtube of the rock house:
http://www.youtube.com/watch?v=VB06kISmARY
Jim,
You should be on 60 minutes!
That “wine cellar” looks like something from a future child abduction case. Yikes. Creepy.
LOL @ The Rock House. I missed seeing that vid before. Pretty entertaining.
How “open” is an open house if the property is not listed beforehand?
The “colliding trains” reminded me of this…
I don’t see the Rock House entry on this blog…only the Youtube entry. Was there a bubbleinfo blog entry ~12/1/09?
Great work…. I think the only way this is going to stop is if the banks wise up to this kind of fraud. They are getting taken to the cleaners. All they have to do is make a single call to you and ask “Was this listed on the MLS for enough time to get good offers and is the final price reasonable?” Easy. Why aren’t they doing this.
Is it possible that the board members themselves might be in on the scam? In my neck of the woods, whenever any type of criminal activity is being committed in broad daylight over a long period of time, it usually means the authorities are involved in it.
Our current full exposure criminal activity involves a national construction union intimidating and threatening its own members with violence in order to extort money from them. And the provincial government isn’t doing anything about it despite its disclosure weeks ago.
Jim, the only thing you can do right now is to continue being honest and ethical. As long as criminals are in charge of the area’s real estate market, nothing will change.
To what extent are the banks being indemnified by the Feds for losses on short sales?
Jeeman,
I deleted the post after a lady really got fired up about the owners of the Rock House, who are very good freinds of mine and as straight as anyone I know. I think she was talking about a different lot, because she was going on and on about how they just bought it and took advantage of people etc., when I was on-site 12 years ago when they were building it. I’m not going to let my friends get unduly crucified on my blog.
Ah, that makes sense. No need for ad hominem attacks. I would be happy buying that lot for $1M and putting a double-wide there. But seriously, nice lot, and I’m sure the quality of that house will eventually be awesome, since we don’t have the plans of the final thing. The Flintstones would be envious, for sure.
Please, Jim, spare us all.
I don’t have a dog in this fight, am not a realtor, and am not in the housing or banking industry.
You can complain about these guys to SANDICOR, but SANDICOR is the entity that makes it happen. In my experience in buying 4 houses in 3 cities, San Diego has the absolute worst realtor industry. And when you look at it, it’s easy to see why: SANDICOR. Their lock down on the market, helped by the big realtors, keeps commissions too high, and keeps the industry chummy for the insiders.
So when you complain that SANDICOR is the only group that can do something about this guy, remember, they’re probably acting slow for a reason. The guy probably knows somebody.
Altho Mrs Davis went ballistic, she hit upon one of the problems with this issue. The banks have these sweetheart deals as the one described between One West and Indymac.
http://www.fdic.gov/about/freedom/IndyMacSharedLossAgrmt.pdf.
The agreement states that the FDIC will reimburse the lenders between 80% and 95% of the loss suffered on the ORIGINAL loan amount. The greater the loss, the higher the percentage!
The banks are also so understaffed that it is ridiculous. While talking to a negotiator recently and asking why it took so long, he replied that in his office, he was one of 500 negotiators working for this bank and he had over 300 files on his desk. He said, “you’re one of them”. So Jim you are correct in your assertion that the local board has to enforce the rules and take care of the problem. The banks don’t care because of these sweetheart deals that they have and they are not staffed properly to handle it themselves. Keep truckin’ bro.
First
Banks do not hold mortgages, the American taxpayer through FNM and FRE own the mortgages. They mortgages are managed by processors.
Our elected leaders have deemed it is more important to let fraud like this occur. Think about this how many minds went into developing HAFA? Yet the did not include Jim’s recommendation, the processor hire the broker for a short sale. The processor is the actual seller so it makes 100% sense. They also stated something along the lines that the broker commission must be 6%. Hmmm, you think the NAR helped write that one?
BTW how much do you think this agent/broker pays the people who list with him?
NorCalNorm
Why are banks understaffed? Cause the government is the actual owner and only pays them a certain amount to manage the loans. Banks do not suffer losses, they just meet their contractual servicer obligations.
So I just read all the posts. Banks will not learn lessons cause the loans are not their loans. The loans belong to us through the US government. We through the government cover all the losses. The government through their actions has made it clear this is what they desire to happen.
NorCalNorm
The whole Indy Mac/One West incentivized to lose money thing has been totally debunked. http://www.mortgagelawnetwork.com/2010/02/14/is-the-fdic-paying-onewest-bank-not-to-modify-loans/
keepitinflated/Jim
Are you guys really suggesting the Banks/servicers hire the broker for the short sale? How is that going to provide transparency? I mean, on what BASIS are they hiring REO agents now? In my opinion, It is who you know and who you blow. Heck … why don’t we just let the banks market their own properties and short sales??? Sure..give them all the power. That is what the want to do anyway?
keepitinflated – we all know about Freddie and Fannie but banks do own loans when they don’t sell them off and continue to service them in house. also if “banks do not suffer losses” why have 205 banks been taken over by the FDIC since 2007? Why are there 653 additional banks being monitored for their weak financial positions today? Why did the govt step in with TARP money?
Donnie – I read the opinion by the Oregon bankruptcy attorney and he is entitled to his opinion. IMO the fact remains that this policy is working against what the govt is trying to do and that is to stem the tide of foreclosures hitting the market. Our economy will never return to “normal” until the RE market is fixed.
Someone ought to drop a dime to this listing agent’s clients, the sellers. Perhaps a class action on behalf of all similarly situated sellers.
Kicking out of the MLS doesn’t right the wrong.
Approximately 95% of loans since 2007 have been sold to FHA, FNM, and FRE. Prior to that it was about 50%. Needless to say it is most likely that the government is eating the loss.
If the processor hired the agent then the agent would be honest and get highest price to keep the business stream. Compared to the person with the name on the title taking a kick back from a realtor selling it to their investor friend.
By the way most of those bank failures (with the notable exceptions WaMu and Indymac) have been smaller community banks that have had bad business loans.
NorCalNorm, if the bank/govt/processor is owed more than the house is worth why shouldn’t they have all the power. Is the goal to make sure the person with the name on the title gets a kick back?
Agree with keepitinflated. The banks should be the only party involved in the sale (with govt oversight, if the govt is eating any portion of the loss). The person who has something to gain or lose should be the party who controls the transaction. The FB seller has nothing to do with it, especially if they are not going to be liable for any losses on the loan.
Thank you
Maybe it would end Craigslist ads where brokers pay bounties for short sales.
I am absolutely amazed that you guys actually think that putting more power and control in the hands of the lenders is going to address this problem. Of course there is no evidence of exactly how widespread the “problem” is.
And that government oversight can really monitor it? Puhhhhleeeez.
The reality is that the whole short sale flip process is going to be under the microscope by the DRE. Just read last the bulletin last week. Stay tuned for more scrutiny.
And I don’t want to be too argumentative here… but NorCalNorm, the IndyMac/One West shared loss agreement would only apply to the loans OWNED by One West which is only about 7% of the total loans serviced. Only in worst worst case scenario would the Govt. have to pay anything associated with the clause. http://realestateinvestordaily.com/market-information-news/fdics-sale-of-indymac-to-one-west-bank-sweetheart-deal-or-not/
Peace/Love/Dove
Here is a link to the DRE News/bullitin I think DonnieB is refering to:
http://www.dre.ca.gov/pdf_docs/Article_ShortSales03_2010.pdf
Could someone please help me out to figure out SD RE – what is the Debt Ratio for North SD Buyers? The number I mean is as follows:
Calculating a Debt-to-Income Ratio for Mortgage Loans
Prospective homebuyers must answer many questions, but the first is always “How much home can I afford?” Calculating a debt-to-income ratio will give you a good idea of how much of your income will be available for monthly mortgage payments, including principal, interest, taxes, and insurance, collectively referred to as “PITI.”
Many experts agree that PITI, the total amount you pay toward your mortgage, should not exceed 28 percent of your gross income. The total amount you pay in debt-related expenses, including your mortgage, car loan payments, credit card bills, student loan payments, and any other debts, should not exceed 36 percent of your income.
So how much can you afford to pay each month? The first step is to determine your total income (salary, bonuses, etc).
The total of all these figures will give you your gross annual income; dividing by 12 will yield your monthly gross income. Multiplying your monthly income by .28 will give you an idea of how much you can afford in monthly mortgage payments.
For example, if your total household income is $80,000, your monthly income is $6,667. At 28 percent, you can afford to spend $1,867 on your mortgage per month. At 36 percent you would have a total of $2,400 in debt-related expenses per month.
At this point you are ready to consider your loan options and use online calculators to see where you stand. Continuing with the previous example, if you find a mortgage loan with a monthly payment of $1,500, you would be well under your $1,867 limit. Next, factor in your average monthly credit card expenses, car payments, and any other rotating charges. If that total comes to $800, your total debt burden would be roughly $2,300, $100 less than your $2,400 limit.
So what’s the average multiple for North SD buyers that I am competing against?
I recently met a realtor who immediately told me “this is the way it is done, I put it on the MLS for less than a day and mark it contingent immediately so my investors get the offers. That’s why you aren’t seeing my homes.”
Then he asked me if I wanted to get “in” on this.
From Kingside’s link:
III. Conclusion.
Real estate and mortgage fraud is escalating and is never acceptable. It hurts everyone. Those who engage in short sale flipping fraud through the use of misrepresented valuations and/or manipulated prices make profits at the expense of lenders, which often times means at the expense of taxpayers. This takes money out of the system that is designed to assist homeowners and lenders. Furthermore, it manipulates the value of the real estate market, harms communities, innocent buyers, sellers, and lenders, and may ultimately scare off lenders from doing short sales, or from lending to purchasers of short sale properties.
——————
1. Why are they NOW worried about fraud, when the same kind of fraud (or worse!) was going on during the bubble, causing prices to be artificially inflated? Every single transaction where the buyer didn’t have to document income/ability to pay the loan was fraud; and every transaction where the appraiser was given a number to hit was fraud, IMHO. Funny how they didn’t seem to care about that.
2. A couple of years ago, I tried multiple times to get the F.B.I. involved in suspicious short sale transactions. They said that this type of fraud wasn’t even on their radar because it wasn’t widespread enough.
Way to close the barn door after the horses are gone.
3. Every single program the govt is proposing to “help people stay in ‘their’ homes” is encouraging this fraud.