Shades of Grey: Part 1
April 2nd, 2007 by RYBPurchasing a home should be one of life’s simplest and most rewarding experiences. The process itself represents a right of passage into a world of responsibility tempered by the emotional and financial comfort of homeownership. The place where you choose to live, after all, is much more than an investment. Potential buyers, already pressured and rushed, can find themselves unprepared for the uncomfortable questions that often arise before closing. Regular readers might remember a post that I contributed to this site two months ago. I graphically recounted the personal behavior that led to my incarceration in a federal prison after many years of working in the title industry. It’s my intention, through a series of posts, to share consumer-oriented advice that can’t be found elsewhere. Feel free to contact me with questions via email at edr@rybconsulting.com or to visit a title industry blog that I host. Title-opoly deals honestly with a wide spectrum of real estate issues and many of it’s readers are consumers, government regulators, or professional educators.
You’ll find that most of my opinions are very conservative since they were shaped by unique experiences. For example, most real estate pundits blame consumers for a startling increase in reported fraud statistics and subprime foreclosure rates. I don’t, and point squarely at the real estate industry and more specifically at it’s self imposed and very complex culture. Most people working in other careers simply lack the time and ability to learn enough about the system to mastermind a fraudulent deal. Real estate crime requires a great deal of planning and coordination among numerous insiders or others with knowledge and contacts; it takes a team. Consumers blindly following the recommendation of licensed professionals sometimes find their integrity or sensibilities compromised.
Former Secretary of Housing and Urban Development, Mel Martinez, sought sweeping reform of real estate settlement practices after closing on a home in the D.C. area. Secretary Martinez, a seasoned attorney and the nations’ top real estate regulator, found himself both confused and concerned after spending an hour at a table with unrecognizable documents strewn in front of him. I can’t keep that from happening to you, but I can arm you with an intimate understanding of the pitfalls of any housing transaction and their possible consequences. I’ll describe the criteria that you need to consider when selecting a real estate agent, loan officer, or title/escrow agent. You’ll learn enough about the proper progression of events from contract to closing to stop and ask poignant questions when something doesn’t seem right. And, if an unspeakable situation does present itself, you’ll know enough to recognize it as such and will have an exit strategy in place that protects your interests. A community-based approach to fraud prevention presents opportunities for consumers to avoid exploitation, especially when it’s initiated by industry insiders.
An informed and concerned community of consumers is the fraudster’s worst enemy!
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Tags: bremerton real estate, poulsbo real estate, real estate fraud, silverdale real estate
Ed, I have been a victim of fraud ! In 2007 I decided to build a home, we were helped by a mortgage broker who set
evrything up for us.We gave him tax returns,bank statments
job information pay stubs and investment info ect credit score of 784. He told us he would get us set up by the best source he could. We were called 2 weeks later and told that we were approved by a local federal credit union. We were told to come in and sign, which we did and construction started a month later. The broker had also set up the hard loan so the construction loan could be paid off when it was finished.
Near the time that the home would be done we asked the broker to proceed with the hard loan. He later informed us
that the company would no longer do the loan. I then tried
several other places and was told that these large loans could no longer be given. I then put the home up for sale hoping it would sell, no luck.Shortly after that because of the ecconomy I was laid off from my job of 19 years.
I was advised by the realitor to contact the CU about doing a short sale, which I did. The CU then sent me the
forms to fill out for the sale. Among these was a new application which I filled out and sent in. The loan officer called me with some questions about my income. I
then asked her what had been on the application when the
loan was approved, she said the broker had used a stated income. I asked her to send me a copy of that application,
but she never did. We then had several offers on the short sale but all were turned down.I was then informed that they were going to forclose on the home. I still had
no job and so they forclosed and the propertyu went to a sherifs sale and was sold. The selling price was less than 50%of the loan.After trying everything else we could
we were forced to file a BK.
The day before theBK was going to be discharged we were served with another summons for a adversary proceedings
charging us with fraud.Attached to the summons was a long
waited for copy of the original application we had requested.The 1st thing we noticed is it was unsigned and undated. Next the property they showed as being the site of our new home was wrong. Next was our home address was wrong. Then we noticed the income they had shown, it was over ststed by $5,500.00 a month. We latter discovered that the apprasial they had used was on the wrong property. Still latter we found the title company on its records showed 4 different transaction on the sale of the property in 2 weeks alll using the same recording numbers.
I had been shown owning the property before the guy who sold it to me, and my loan had paid for his purchase so he could sell it to me.
The CU shows to have taken my application on the same day the loan was approved, it was for $586.000.00. The application they show as mine has the wrong home address,
wrong lot, wrong income and no signatures or dates on it.
The application for membership has been proven to be a forgery. The deposit in a savings account required by the
NACU was never made and is required before you can recive a loan. There is so much fraud in this I don’t no where to begin, please help ! I believe the loan officer and the
mortgage broker were doing anything they could to make sure they got paid a nice commission. I paid them both a 1% fee so that everything would be done right, but what I got was wrong after wrong after wrong.
Thanks Ed,
Dennis
tapluch01@msn.com
Ed, I am totally pumped to read the next installment. When I got to the end of the article and realized that it was just the 1st Part….it was like watching the Star Wars episode, “Empire Stikes Back” and being completely bummed out, not knowing how it ends! At least I won’t have to wait four years for your next article, will I?
Ed, it’s fabulous to see you back at Soundbite. You’re offering an incredible opportunity for folks to learn from you, myself included. I appreciate your willingness to help others avoid some pitfalls and learn from your experience. Thank you.