Dept of Real Estate in California cracking down on the "Short Sale Experts"

Went to legal update seminar.  California DRE is cracking down on the various claims and certifications of short sale "experts".

 

Agents crossing the line and providing "legal" consult.  Telling homeowners short sales is their best option when it could be their worse option. 

 

Those groups and individuals soliciting listing agents and promising them 3 commissions if they will give their short sale listing to them.........the scams abound...... Apparently the California Bar Association has also come down on attorneys associated with these scams. 

 

Homeowners in distress need to consult with a real estate tax attorney and/or at the very least a CPA before moving forward in a short sale.  Other options may better protect them.

 

How many times we have echoed this over the past years.....

 

Chase and US Bank are aggressively going after borrowers who defaulted and completed short sale.

 

She cited one case where the short sale was approved and upon further audit by the bank found questionable evidence of mortgage fraud and cancelled the short sale and now is doing investigation that may lead to criminal charges or fines on a loan that was apparently a  non recourse loan...If the party had let it foreclosed would not have subjected themselves to the intensive scrutiny. This was one of our fears early on and one of the driving forces behind clients  seeking legal counsel from the day we started doing short sales.   

 

 

 

 

 

 

 

 

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One of the reasons I left my previous brokerage was because one of the agents in that office was promoting these scams, and the management was encouraging her. This was one of the largest franchises in the country. I'm glad the DRE is finally doing something.
Keller Will... has many franchisees around the country who encourage it unfortunately. Given our high presence in the industry, we have been solicited by literally hundreds if not thousands of these worthless human beings.
I am not going to ask which Franchise but I bet I know.
Hate is a very strong word, I really don't hate much of anything in this world, except those short sale flip scam artists. The world would be a MUCH better place without them!

Homeowners also have to watch out for "distressed property experts" who have never even closed short sale transactions!! Wouldn't it be an ethics violation to call oneself a "distressed property expert" after only taking a weekend class... LOL...

But seriously, fraud is rampant in the industry. It stinks and makes it harder on the ones that are doing things ethically and legally.
Absolutely....I am still being hounded by them........They recoil when I do not jump up and down to their opportunity of making 3 commissions......

Yes it is unbelieveable how many agents once they take a class think they know everything.

I know I learn something new everyday and I have done many ,many short sales.
I totally agree. Fraud has had reign much too long.
Even after closing hundreds, excluding my work with SSSN, and just learned TONS of new stuff on our cruise just getting together with a handful of other experienced short sale agents from around the country.

Terry, trust me from experience, they'll give up eventually. I've told off so many that I have probably angered most of them in the country by now and they usually leave us alone!

Joseph, education is VERY important, but EVERY person in the industry, whether an agent, investor, attorney, negotiator or whatever, MUST start somewhere. While an agent shouldn't get their experience at the expense of homeowners, I'm sure you'll agree that there is no substitute for experience. Education, coupled with mentoring under experienced agents is probably the best grounds for ethical success.
yet another reason why Agents should not be doing Short Sales with out INTENSIVE education. Illinois will soon require licensing, over and above the RE license to do short sales.
What has been scary is short sale "experts" who do not have even a real estate license offering their services to negotiate short sales
And charging upfront fees and agts and sellers falling for it
what is even more scary are RE agents thinking that their license somehow qualifies them for negotiating a short sale. Its a banking issue, not an RE issue.
It also requires that there be E&O to cover any issues that arise and many of these Short sale negotiating companys are not bonded and licensed or insured......

It goes without saying that many agents were forced into short sales.........HOWEVER , NO agent should interpret short sale approval letters and give legal advice as to whether or not a short sale is the best option for any borrower much less interpret a short sale approval letter. That is where the line has been severely crossed and where some of these certifications has opened a pandora's box.
bingo Terry. And you better review your E&O, because mostly likely, it DOES NOT COVER short sale screw ups, because short sales are outside normal agent business.
Joseph
Anyone in the State of California involved in negotiating short sales MUST have a real estate license and/or be an attorney. Our brokerages , at least the brokerages I have worked with have extensive E&O policies and have checked their policies in re: to such. California Association of Realtors has provided specific language to our short sale listing addendums as well as short sale purchase agreements that there are no guarantees and that we are not attorneys and cannot advise as to what action may best protect a borrower and that any and all fees are entirely subject to the sellers lender approval.. It is very specific that legal counsel review final short sale approval letters before proceeding.

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