Friday, July 15, 2011

Real estate fraud is alive and well

It appears fraud didn't just exist on the up side of the bubble, it exists on the down side as well. CNN Money explains short sale fraud:
The scam artists, usually real estate agents, will secure a legitimate bid on a home, one where the borrower owes far more on the mortgage than the home is worth. Then they arrange for an accomplice investor to make a lower offer on the home.

The agent then presents the lower bid to the lender and asks them to forgive any remaining balance owed — without disclosing that there was a higher bid made on the home. Once the short sale is approved, the scammer then sells the home to the higher bidder, often on the same day. ...

Such transactions are expected to cost lenders more than $375 million this year, up more than 20% from last year, according to CoreLogic. ...

To get the banks to approve low bids, appraisals or broker price opinions are manipulated. ... Sometimes, said Hagberg, fraudsters bribe appraisers or brokers to get the prices they want but they can employ sneakier methods as well. ... Sometimes an agent will point out every defect in the home to get appraisers to reduce their values, according to Hagberg.

The impact of short sale fraud goes well beyond the direct losses to banks. These frauds have become so common, it has become more difficult for legitimate short-sale transactions to go through. That hurts sellers because it forces more of them into foreclosure.
Just one more reason not to trust Realtors®.
Posted by at 12:58 PM

9 comments:

  1. al ritilaJuly 15, 2011 10:07 PM

    You know, your rabid hatred of realtors so distorts your objectivity, you neglect to think things through. This fraud is done by a statistically insignificant number of agents, who are undeniably wrong, immoral, disgusting. However, it is unfair & inflammatory to impugn the ethics of the whole industry because of the crimes done by .00214% of the agent population. That figure means 2 agents in 1000. I work with the defaulted real estate industry and am very familiar with these stats. Your article unfairly portrays the thousands of honest, ethical agents out there.

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  2. HistoricPropertiesForSaleJuly 16, 2011 2:07 PM

    Thanks for posting this.  Knowledge is power.  Scams happen everywhere and on all sides of the fence.

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  3. Wills McGillJuly 17, 2011 4:22 PM

    James bud, I'm sad for your ability to so easily label an entire group of people. In this case Realtors. There are bad apples within any industry, how foolish of anyone to think there weren't. I'm a Realtor. One who got into the business at it's "worst" as a way to make a living, an ethical and fulfilling one,  b/c I know I'm HELPING PEOPLE navigate and negotiate through the bullshit I know can and is out there. I know I help people daily through what I do and most importantly, so do my clients/friends. Should you ever want to touch base to berate and/or thank me for pointing out how ignorant a few words/opinions/sentences can be to taint the perceived legitimacy of an otherwise informative article, feel free to get at me, my name is Wills McGill and you can google me to get my e-mail address/other contact info. I'm sure you're a great person, guessing you've just been f'd over to some degree within a transaction. I hope so actually, or else your disdain carries even less weight. "Steroetypes are bad..mmmkay" -Mr. Mackey 

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  4. Ben SpoffordJuly 18, 2011 1:46 AM

    This is an incredibly irresponsible piece of garbage. I am not a Realtor but an investor and the vast majority of Realtors are honest and possess integrity in their business dealings. The writer of this article should be fired.

    ReplyDelete
  5. Joel M. AndreJuly 18, 2011 7:29 PM

    I don't think that every real estate agentis like this. Certainly there are some good ones mixed in the bag. I agree with Ben and his comments. 

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  6. Armond MatevosianJuly 20, 2011 3:19 AM

    And yet here we are in a real estate crash caused by Realtors, Banks, Investors, and greedy owners/buyers....do you expect me to believe this was caused by a MINORITY????

    Spare us.

    ReplyDelete
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  9. New York Real Estate CEOctober 26, 2011 4:23 AM

    One thing that I would definitely like to have with my real estate agent is that he/she is very well trained in appraising houses. I surely wouldn't want to be visiting tons of houses then only having to complain about things that I don't desire or don't like such as broken stuffs in the house.
     

    ReplyDelete

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