In an article written by Melissa Dittmann Tracey who is a contributing editor for REALTOR® magazine, she outlines 5 Real Estate Scams everyone should know about. They are:
1. The Foreclosure Rescue Scheme
2. Loan Documentation Fraud
3. Appraisal Fraud
4. Illegal Property Flipping
5. Short Sales Schemes
To read the entire article, follow the link below:
http://www.realtor.org/rmolaw_and_ethics/articles/2010/1008_law_mortgagefraudscams
I don't even want to know...
Foreclosures..and we think WE have it bad!
When we lose our homes to Foreclosure in the U.S., we suffer tremendously. Personal, financial, and business repercussions. But, those poor homeowners in Spain…eeek! When they lose their homes, the Banks put them into “debtors’ Prison”. The homeowner loses the home, but assumes all the debt plus penalties and interest pretty much for life. Spain, apparently had a similar build-out of homes, easy loans, and now a collapsing housing industry..http://tinyurl.com/23slgt2
Further to my last post concerning the moratorium on foreclosures, please visit www.realtor.org/foreclosure for the latest developments and additional information.
When the ‘biggest’ bank in America does something, people notice… Friday, Bank of America (BofA) announced that they were joining several other large lenders and stopping the processing of foreclosures nationwide which started a lot of speculation about our industry and, oh my gosh, what are we going to sell? There was some talk about this being great news for those people currently living in a home that has received a “Notice of Default” and is in the foreclosure process. Well, if BofA has stopped the proceedings, then I guess that those people can just live there for free forever… Not quite!
The problem, as I understand it, is that there are 23 states (not California) where the foreclosure process requires a judge to sign off on the proceeding and questions have been raised concerning the validity of the files the judges are signing off on. The bank files are many pages thick and the person in the bank who has the authority to sign off on these files before they go to the judge may have up to 8,000 files to review per month (about 50/hour) which is an impossible job for a single person to read and analyze up to 400 of these files per day. So most of these files that have been signed off on, simply have not been reviewed. Some of these files “may” have incorrect information in them and in fact the buyer “may” not have clear title which could obviously lead to huge problems for the bank, title company and buyer down the road.
The moratorium has been called to give the banks an opportunity to re-review these files and make sure that all the t’s are crossed and the i’s are dotted and to rethink the review process to make sure that these transactions are legal and complete.
So we know that the problem is that we don’t know for sure what’s in these files. The real problem for Realtors in California is that we won’t be selling foreclosures in the near future. These banks have identified a rather large liability arising from the possibly clouded titles on foreclosed home transactions not only for themselves but also the title companies, buyers and the agents that sold the foreclosed properties. The good news is that this issue doesn’t appear to affect “short sales” at this time.
SB1178: Anti-deficiency Protections for Homeowners..
Hoping that the Gov signs this one. Not asking for ALL homeowners who took out equity from their homes to have this protection. What this bill will do is extend the anti-deficiency protection to Primary Homeowners who refinanced their original purchase money loans. When Owners refinanced to get a better interest rate, lenders did not tell them that the protection is lost if they eventually lose their home to Foreclosure or Short Sale. This is on Primary Residences only. As it stands now, the Lender can not only take their home, but can also pursue them personally for the difference between the current value of the property and the new mortgage balance.
This was unfair to allow Lenders to use this technicality, since most owners are unaware that with a Refinance they lose their anti-deficiency protection in this State. Hopefully, this Bill will pass and primary homeowners that refinanced their purchase money loans will STILL have a non-recourse loan. This would help them tremendously whether they choose to Short Sale or lose their home to Foreclosure..
I like this idea and sent the Gov a letter asking him for his sig. Primary homeowners in CA should be protected from this ability by the Lenders to pursue for deficiency..whether they refinanced or not. PRIMARY RESIDENCES ONLY. We’ll see what happens..
If you need more specific information about Short Sales, contact me at: kjkpolo@earthlink.net or give me a call! 760-285-3578
More and more investors are buying foreclosed properties at auction..they aren’t waiting for that clear title and inspections..just buying and trying to turn a profit quick.
Here’s the California state law extending the notice you MUST serve the tenants upon acquisition of your new foreclosed property….
For more information on how to save your own home from foreclosure, give me a call at:
760-285-3578. I am a certified Short Sale specialist and I work with a team including a Short Sale negotion team and also a real estate attorney to help get your Short Sale closed!
Great article that Kim posted! One point that struck me in a recent office meeting that I hadn’t thought about (my son TG is the short sale expert on our team) and was touched upon in Kim’s article is that if a property has a home equity line of credit as a second and it gets written off in a short sale or foreclosure, the lender of that HELOC may, in fact, sell that loan to a collection agency if any of that HELOC money was used for anything beside the home it was attached to like a new car, vacation, etc.. Just another reason to seek counsel of a CPA and/or lawyer. I’m sure that a bout of long term harassment from a collection agency would not be much fun…