Readers Respond: Your Experiences With Short Sales and Mortgage Fraud

_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}

2nd lien holder wants seller incentive

This sounds like a deja vu. In my case, if the 2nd does not take 8.2% of the sales price the property will be foreclosed on. Chase will not allow the second to take their seller incentive so the seller is foregoing the incentive so it can close. Now the 2nd want 5K, about 50% more than offered by Chase. I thought Chase offered them a fair compensation. To which agency does one report such greed . Checking into a QWR. Any help or suggestion is appreciated

—Guest Margaret Amador

2nd wants my incentive funds cuz 580e

Have a first and 2nd agreed to shortsale with incentive program from bank offers me a large sum once shortsale closed. I am ill no income & agent sent hud1 2nd with25k incentiv. now 2nd says wont release lien unless they get entire 25k due to 580e????? But my letter from bank offering incentive 25k states I get it no matter what as long as I shortsale and they have offered 2nd 6k. But they want both 6 and 25k I must have some rights here.... I am going to be homeless with my child if I don't find way to hold bank 1st accountable and ffind a way to get 2 nd to accept 6k.......

—Guest homeless

I thought I was alone in this problem...

I'm dealing with a REMAX agent in Rockville, MD and he is "bargaining to get the 2nd lien holder to accept less than the 22k they are owed - and I will must give HIM 60% of the balance he saves me!" He's the listing agent- how can I get him, and SLS, to accept the 3k from BOA and be done with it?

—GREENovaters

and the bank in question was CHASE

Barely got out with our earnest money when we discovered that a ReMAX agent was expecting us to make a secret payment to Chase, the holder of the 2nd, that would have left us liable for defrauding the holder of the first: PNC Mortgage. When we finally realized that was happening, we instructed our attorney to send a letter demanding that the seller supply verification from PNC stating that they knew ALL about this. Of course, seller and agents refused and tried to assert we were failing to perform by requesting such a thing!! We stood our ground and said we were ready to close but the seller insisted on canceling AND tried to keep our substantial earnest money deposit. ($75,000) Our attorney made it clear he would pursue this matter with full force and they backed down. We picked up the money yesterday and ran right to the bank to make the deposit. Whew! Never knew such slimy stuff could happen in a nice town like Wheaton, IL.

—Omsker

Short Sale

Is it true that after a short sale, the seller has one year to invalidate the transaction after close of escrow and recover his property?

—John.william

Everybody wins but us

We were transferred with my husband's business in 2008 from VA to FL. Our home plummeted in value as we listed it, newly remodeled inside and out. The bank told us and our Realtor they would NOT consider a short sale as long as we were current on our mortgage. After 6 months and losing 2 offers, we stopped paying and got behind. Another offer came in at 1/2 our purchase price and my husband's company (finally) stepped in and said they would pay the difference. Both 1st & 2nd mortgage paid in full, new owners got a house for half what we paid and put all our money into. We still got hit in our credit score and our credit cards were closed even though we NEVER were late on anything but the house (trying to sell it by the banks rules). We tried to do everything right and lost all our money invested, our credit score and accounts, and even ended up paying taxes on it since it was shown as income when his company paid the difference! We now have nothing and rent.

—Guest C A

Follow up

BTW, I just checked the preliminary HUD-1 and the $40K promissory note for the 2nd/3rd is not listed.

—Guest mm

Frustrating

I just got approval for a short sale after 6 months of negotiating. I owe $290 to 1st. Have a 2nd & 3rd with another lender for $100K combined. House was approved to sell by 1st for $280 with the 1st getting $241K and paying the 2nd/3rd $10K. The rest is closing costs. However, the 2nd/3rd wants an additional $40K payable over 12.5 yrs @ 3% from me to approve the sale. If I agree to it, it messes up my plan to file for bankruptcy for my other debts, because it would be fraudulent to accept the new debt and file. Yet I have no desire to pay them $40K on a house that I no longer own. So I am most likely going to have to back out of the sale and foreclose, which is worse for everyone. This is a frustrating system

—Guest mm

Contributions Out of Escrow

Why are the seconds taking this stand? Probably because they get something out of it. Could be favorable tax treatment, more TARP money or the right to pursue collection; hard to say.

—ElizabethHomebuying

Contributions out of escrow

I believe the heading is accurate and banks are pushing seller to commit fraud; in a different aspect with me at least. This time is the banks doing the financing for the buyer. I've had a loan approved for a buyer that was willing to cover the difference to the 2nd TD ($5000 the seller didn't have) and we disclosed it on the HUD. The bank stated that their investor will not and can not do it. According to CA DRE, all monies must be disclosed on the HUD, we tried but they won't approve it. As a matter of fact what caused this? The first TD allocated $3000 to the second and the second in return did not budge and requested $8000. The buyer agreed to pay the difference and it was disclosed on the HUD and the purchase agreement; however our lending institutions will not touch it. Why is the second taking this stand when in fact if they foreclose the may get nothing? Becasue they can sell the debt as a collection and make more money. Now, is that ethical?

—Guest Ciro