Glenn Kelman of Redfin has been deceiving the public since the day they started the company, and he gets away with it because we don’t have a watchdog department or any enforcement of truth-in-advertising. We live in a society where anybody can say anything and never be accountable to the truth.
I’ve had enough, and I’m not going to take it any more.
Here are examples:
He says Redfin agents sell houses for $3,000 more than traditional agents. But you can only measure that if we sold the same house on the same day! He is using averages of different sets of homes, which is apples and oranges – yet it was one of their featured statements on their website for a long time.
He says that his sellers save $9,000 over traditional agents. You can say you charge a lower rate, but you can’t calculate the actual savings until you have the sales price. Agents don’t sell houses for the same price – houses sell for different prices depending on the agent’s method and expertise. If I sell the house for $10,000 more than you, then the sellers would MAKE an extra $1,000. It is deceitful for him to make such claims.
He says you will ‘close without a hitch’. A Redfin agent told me yesterday that 100% of his deals have a hitch.
He says they are full service. But then you send out the $50 girl with the least experience of anyone on your team to show buyers around? If you are ‘full service’, then you should have your BEST agents showing homes.
His home-flipping device, Redfin Now, is the biggest conflict-of-interest in the history of real estate. With Zillow’s Instant Offers, at least they send their staff people to give you a quote to purchase your home, and then direct an independent agent to give you a second quote. But Redfin offers the whole package together. But you can’t have it both ways – either you advertise that you are a full service realtor, and thus have a fiduciary duty to get the best deal possible for the seller, OR you are a cash buyer. But they run their flipping platform off their same website.
They know it’s a conflict too, and have a disclaimer at the bottom of the page:
Can you read print that small? Me neither, so I got out my magnifying glass.
This is what it says:
Redfin Now is a separate company owned by Redfin. Agents representing Redfin Now represent Redfin Now only and do not represent sellers in the sale of your home. If you decide to sell to Redfin Now, neither Redfin nor Redfin Now will represent your interests regarding the sale of your home. For this reason, it is recommended that you seek independent representation in the sale of your home. You may be able to sell your home on the open market for more money than Redfin Now’s offer price.
People who are drawn to a ‘full-service realtor’ website should get a fiduciary consultation only – that is what’s in their best interest. If you are running a separate company that buys homes, then it should be on a separate website.
The latest is Glenn saying that portals should include links that direct the consumer back to the listing agent. He says that it will encourage listing agents to stop ‘pocketing’ their listings, and sell them on the open market instead. But Redfin does the ‘Sold Before Processing’ to their sellers too, so you can’t help but think Glenn has an ulterior motive.
Mister Mozilo, a mortgage industry maverick who co-founded Countrywide in 1969, and nearly 30 years later co-founded the dramatically collapsed IndyMac Bank (now OneWest Bank), is widely regarded as one of the more Machiavellian sub-mortgage-men who helped march the U.S. (and global) economy straight off the cliff in the mid-Noughts.
While Mister Mozilo and his mortgage-making army pushed and pedaled sub-prime home loans, he talked up the then-flourishing company’s stock price, earned hundreds of millions in compensation, and cashed out more than $400,000,000 worth of Countrywide stock, a large portion of it during the last couple of years of his tattered tenure as the king of Countrywide.
Alas, the sub-primed fueled real estate bubble burst sometime around 2007 and Mister Mozilo left Countrywide in 2008 after the crippled company was sold for $4.1 billion to Bank of America.
In June 2009 the Securities and Exchange Commission (SEC) charged Mister Mozilo with insider trading and securities fraud and in September 2010, Mister Mozilo settled with the SEC and agreed to pay $67,500,000 in fines, $45,000,000 of which was paid by Bank of America. Despite the sizable payout, settlement terms allow Mister Mozilo to circumvent acknowledgement of any misconduct. We can’t vouch for or confirm it but online idle chatter says he has a net worth well in excess of half a billion dollars.
Mozilo, in his deposition, continues his long standing defense of his former company. “I have no regrets about how Countrywide was run,” Mozilo said. “We were a world-class company in every respect.“
“We never made a loan knowingly — and it would be stupid to do so — that we knew the borrower could not pay. Never,” Mozilo said. “All our loans had that one standard from 1968 to the end of my rein at Countrywide.”
The diverting of money being wired into escrow accounts to close real estate transactions is a real problem, but the authorities are on it – they have recovered $350 million! Unfortunately, they also mention here that $3.7 billion in losses have been reported:
Federal authorities announced today a significant coordinated effort to disrupt Business Email Compromise (BEC) schemes that are designed to intercept and hijack wire transfers from businesses and individuals, including many senior citizens. Operation Wire Wire, a coordinated law enforcement effort by the U.S. Department of Justice, U.S. Department of Homeland Security, U.S. Department of the Treasury and the U.S. Postal Inspection Service, was conducted over a six month period, culminating in over two weeks of intensified law enforcement activity resulting in 74 arrests in the United States and overseas, including 29 in Nigeria, and three in Canada, Mauritius and Poland. The operation also resulted in the seizure of nearly $2.4 million, and the disruption and recovery of approximately $14 million in fraudulent wire transfers.
BEC, also known as “cyber-enabled financial fraud,” is a sophisticated scam often targeting employees with access to company finances and businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments.
The same criminal organizations that perpetrate BEC also exploit individual victims, often real estate purchasers, the elderly, and others, by convincing them to make wire transfers to bank accounts controlled by the criminals.
Our San Diego MLS quietly removed our complaint button recently. I’m sure they had heavy volume, but they aren’t the realtor police – nobody is. Hat tip to SM for sending this in:
VANCOUVER – The province is hoping to make it easier for you to report suspected misconduct in the local real estate market by launching a new tool.
A new anonymous tipline has been launched by the Real Estate Council of BC, as part of, what it describes, a way to protect potential homeowners.
“This is a way for people who have information about potential misconduct of real estate agents, that perhaps they’re uncomfortable identifying themselves, they have this as a tool to report information to the council anonymously,” explains Executive Officer Erin Seeley.
The tipline is one of the recommendations made by an Independent Advisory Group two years ago. “The council set up this group as a way to report on the improvements the Real Estate Council can make in overseeing licensees and in protecting the public.”
This new tool allows people to report things like a conflict of interest, failure to disclose information, or even the mishandling of money.
There is a complaints process already in place and Seeley adds the new tool is part of the process currently available to the public.
“It’s anonymous, it’s more accessible with the 1-800 number, and it’s a secure forum,” she says. “And it allows people, regardless of whether they’re a real estate licensee or a consumer, they can use this to report misconduct and not have a fear of reprisal.”
Seeley says just like the current process, all complaints are investigated and reviewed to determine whether a full investigation is required. “If there [are] grounds for misconduct and evidence, we’ll take action as appropriate through the channels of investigating. We have administrative fairness and natural justice as key parts of our process.”
Processes to resolve complaints are available, and if a case warrants it, Seeley says hearings can be held by a tribunal.
“We have financial penalties, significant penalties up to $250,000 for licensees per infraction under the Real Estate Services Act.”
According to Seeley, the council receives a number of complaints and has investigated claims of significant misconduct in the past.
The only recourse around here is to file a complaint with the Association of Realtors, and have the Ethics panel hear your case.
I did file a complaint recently, which meant I had to compile and submit six copies of the evidence. The agent was found guilty, and received the maximum penalty for a first-time offender – a letter in their file for 12 months.
In San Diego, this applies to cash sales over $2,000,000 to LLCs.
Wake up and smell the dirty money.
That’s the message federal regulators are sending to the real estate industry in Miami and other high-priced housing markets.
On Tuesday, the U.S. Treasury Department announced it would extend and expand a temporary initiative designed to uncover criminals laundering money through real estate. The decree targets secretive shell companies — corporations that don’t have to reveal their true owners — buying luxury homes. The feds have already renewed the rules twice since announcing them in January 2016.
But this time, there’s a big difference — and it’s putting Miami’s struggling condo market under even more scrutiny.
The rules, previously so limited in scope that they applied only to a few hundred deals, will now cover every big-ticket cash transaction by shell companies in seven major markets. They are the South Florida counties of Miami-Dade, Broward and Palm Beach; all five boroughs of New York City; San Antonio, Texas; Honolulu (included in the order for the first time); and Los Angeles, San Diego and San Francisco.
“This is going to gather much more information,” said Andrew Ittleman, a South Florida attorney who specializes in anti-money-laundering laws.
Critics dismissed Treasury’s original anti-money laundering rules — first deployed in Miami-Dade and Manhattan last year — as so narrow that they were practically toothless.
That’s because only less common methods of cash payments such as money orders, personal checks and hard currency had to be reported.
But the latest order includes wire transfers, which are electronic exchanges of money between banks. In most home sales that don’t involve bank loans, money is sent from buyers to sellers through wire transfers. Regulators were missing out on a huge swath of transactions.
“It exempted most people from disclosure,” said Alan Lips, a partner at Miami accounting firm Gerson Preston. “In today’s world, people wire money.”
The US housing market has been a perfect platform to launder large amounts of money, no questions asked. Brokers, banks, and other industry professionals played along. There were no reporting requirements. Everyone in the world knew it. And they came to launder their cash by buying expensive homes.
But FinCEN, via its evocatively named Geographic Targeting Orders (GTO), wants to know who these opaque homebuyers are. To find out, the GTOs “temporarily require US title insurance companies to identify the natural persons behind shell companies used to pay ‘all cash’ [i.e. without bank financing] for high-end residential real estate in six major metropolitan areas.”
FinCEN is soliciting the help of title insurance companies “because title insurance is a common feature in the vast majority of real estate transactions,” and these companies can provide “valuable information about real estate transactions of concern.”
In its July announcement, when the program was expanded from two metros – Manhattan and Miami Data – to six metros (including San Diego County), FinCEN Acting Director Jamal El-Hindi wouldn’t say to what extent money laundering was involved, but he did throw in a tantalizing tidbit: “The information we have obtained from our initial GTOs suggests that we are on the right track.”
FinCEN has found that about 30% of the transactions covered by the GTOs involve a beneficial owner or purchaser representative that is also the subject of a previous suspicious activity report. This corroborates FinCEN’s concerns about the use of shell companies to buy luxury real estate in “all-cash” transactions.
It happened to us – hackers got into somebody’s account.
They posed as the escrow officer and tried to divert my buyers’ down payment to the wrong bank account. Their timing was impeccable too.
Six days before closing, an email was sent to the buyers that looked like a normal email from the escrow officer:
Good morning (buyers’ names),
We are getting close to closing. It is important that we get the Cash to Close to avoid delays in closing.
Please tell me when you would wire the Cash to Close.
Regards, (escrow officer’s name)
The buyer asked for the amount and for wire instructions by email – and the hacker responded three times by email and even sounded like the escrow officer. This was the tip-off though:
Please find attached the wiring instructions. It is an account of one of our subsidiary company as our main account is currently undergoing compliance audit. As such, any funds entering the account would be held for review which would grossly affect the scheduled closing date. The total closing cost is X.
The hacker asked for an amount that was within $2,000 of being accurate, and if the buyers had been in a big hurry, they might have just sent it.
Thankfully, Mr. Buyer called the escrow officer direct to verify. The escrow officer was stunned – she hadn’t sent any emails to the buyers that day!
Because no crime was actually committed, the escrow, title, and mortgage companies just shrugged it off. We won’t ever know who the hackers were, or how they got in, but to call it unsettling is an under-statement.
From my buyer:
We felt very unnerved yet relieved. I couldn’t sleep that night, knowing how close we came to losing a substantial amount of money, by nearly anyone’s standards. I personally felt helpless, because I’m not sure what I could have done to recognize this fraud. We consider ourselves pretty plugged in and so we didn’t think twice about getting a wire request from escrow.
The bottom line is, escrow and bank request a lot of items and need responses ASAP so that escrow proceeds to a timely close. Therefore buyers are, in many cases, reading highly technical documents ‘on the fly’, often from smart phone screens. In my case, this meant that I was usually just skimming documents and electronically signing without really studying the material.
The escrow company did say in their instructions that buyers should call before wiring any funds. I didn’t notice this until after the attempted theft of our money. In the future, I would like to see escrow go back to speaking with buyers more often, instead of just emailing documents for signature. It sets a more personal tone and makes buyers more comfortable in picking up the phone to talk to the escrow agent with questions, rather than always relying on electronic communication.
Some escrow companies are now encrypting their wire instructions, but they are missing the point. The hackers are way ahead of us! All they need is a copy of the purchase contract (which agents, buyers, sellers, escrow and lenders email around unsecured), and the hackers can figure out the rest.
They just pose as the escrow officer a day early, and ask the buyers to wire the down payment and closing costs to them!
While we all are concerned about cybercrime and identity theft, it appears taking someone’s money the old-fashioned way has reappeared in a short sale scam in Southern California.
The alleged scam appears to follow the same basic format. A short sale agreement was entered into four to six months ago. The buyer made an initial deposit in the $5,000 to $15,000 range into the listing broker’s non-independent broker escrow. As with most short sales, the process takes several months and the selling agent is assured that the listing agent is working towards lender approval – it is just taking more time. Then the communication slows down, the selling agent begins to get concerned and calls the listing broker’s escrow. There is no answer, no return call, no other number to contact, and the earnest money deposit is gone.
Two Santa Maria men have been charged with allegedly committing real estate fraud involving losses topping $500,000, the Santa Barbara County District Attorney’s Office said Thursday.
Angelo Gabriel Naemi, 36, was arrested for suspicion of five counts of grand theft by false pretenses, and one count of conspiracy to commit grand theft.
Steven Paul Gonzales, 61, was charged with one count of conspiracy to commit grand theft.
“The complaint alleges that Naemi, a real estate salesperson, and Gonzales, a real estate broker, conspired to falsify documents in association with numerous short sale transactions,” the District Attorney’s Office said. “Their actions allegedly resulted in a loss to Fannie Mae and Freddie Mac of over $500,000.”
The complaint also includes special allegations for aggravated white collar crime and excessive losses.
The District Attorney’s Office investigated this case in conjunction with the Federal Housing Finance Agency, Office of Inspector General, Los Angeles Field Office.
The allegations stem from deals spanning between 2012 and 2015 involving properties on the 1200 block of East Fesler Street and 1600 block of Chadwell Drive in Santa Maria, 800 block of West Fir Avenue in Lompoc, 300 block of Price Ranch Road in Los Alamos and the 500 block of Dawn Drive in Buellton.
Naemi’s bail is set at $395,000, and he is scheduled to appear for arraignment in a Santa Barbara County Superior Court in Santa Maria on Thursday while Gonzales is scheduled for Dec. 30.
Gonzales was never booked into the County Jail, according to the Santa Barbara County Sheriff’s Department, so no booking photo is available.
Gonzales became sole owner of CornerStone Real Estate in Santa Maria in 2012 while Naemi is listed as a sales associate with the firm.
In his biography on the business website, Gonzales is listed as “experienced in residential sales, short sales, income/commercial property sales, 1031 IRS tax deferred exchanges, business opportunities, commercial leases as well as new home construction.”
After working as an engineer for Hughes Aircraft, Gonzales has been involved in real estate since 1988, the website says.
On his own website, Naemi states he moved to the Central Coast in 2004 from San Diego and previously worked in the Wells Fargo mortgage department before becoming a licensed real estate agent.
San Diego appeals court overturns injunction that allowed restaurants to reopen https://www.latimes.com/california/story/2021-01-22/san-diego-appeals-court-overturns-injunction-that-allowed-some-restaurants-to-reopen
Gibson, Ford, Brock, Seaver, Kaline, Morgan, Niekro, Lasorda, Sutton and now Hammerin Hank. We’ve lost some of the greatest to ever do it this year. @TommyLasorda is gonna have a hell of a roster to manage up there. #RIPLegends
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