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Short Sale Fraud

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  • William Matz | | 26 Sep 2012, 03:29 PM Agree 0
    In California CCP 580e expressly prohibits lenders from receiving any other compensation thatn the short sale proceeds, a further protection against Fraud #1.

    Fraud #2 became a common pattern. But as lenders now typically get a BPO or 3P appraisal, making this less likely.

    The key advantage of short sales to lenders is that they get more than in an REO resale (absent rehab) and they avoid the administrative problems of additional REO.

    While borrowers (in CA - 580e) can now extinguish lender liability, they still have all normal seller obligations to buyers. Particularly in the case of distressed mortgage property, deferred maintenance may create concealed defects, which - if not disclosed to buyers- can result in post-closing liability that would not have been present after a foreclosure. So sellers need to be scrupulous about disclosures to buyers.
  • Gray | | 03 Oct 2012, 09:23 AM Agree 0
    How does the Author know what is Fraudulent if is she is not an attorney?
    Just a question
  • Chicago short sale lawyer | | 10 Oct 2012, 05:11 AM Agree 0
    "Who Commits Short Sale Fraud?
    The people who attempt short sale fraud will depend on the type of short sale fraud being perpetrated. Sellers, buyers, real estate agents, lenders and short sale negotiators can all be involved in some form of short sale fraud."

    ever heard of white-collared crimes? There are loopholes in the federal laws enable even licensed lawyers to take advantage of their clients. Though their actions are not illegal when viewed according to state and federal laws, lawyers who charge excessive amounts and tries to cut off large portion from short sales are still committing moral crimes. They know that the person is already cash-strapped, but they still try to get as much money as they can from poor citizens :(
  • | | 12 Sep 2015, 06:22 PM Agree 0
    I KNOW PEOPLE WHO DO THESE SHORT SALES THAT ARE FRAUDULENT AND IT WAS PART OF AN ACTION THAT LOST ME MY WHOLE PENSION.MY BROKER STOLE EVERY PENNY I HAD EVEN MOVING MY PENSION FROM LINCOLN FINANCIAL TO MY BANK TO ORDER IT TO BE MOVED. MY MONEY WAS MOVED WITHOUT MY PERMISSION OR KNOWLEDGE AND NEVER DEPOSITED. ASIDE FROM THAT SHE STOLE A TOTAL OF ABOUT $200,000.00 from me AND SHE IS INVOLVEL IN THESE ILLEGAL HOUSING TRANSACTIONS.SHE PURCHASED THREE OR FOUR HOUSES IN 2012 and with investigation going on she has been unable to sell I think. I hope she goes to jail for senior abuse I'm in my 70s and needed that money for retirement,I worked so hard to save for the future. Be sure to do a thorough broker check on whomever you turn your money over. Thought my broker was a friend but apparently she hated me and was waiting for me to die.
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