Detroit Real Estate

I read that with the Home Affordable Foreclosure Alternatives (HAFA) program launch on April 5, 2010 there will be a rise in short sale mortgage fraud.  I hate to say it but it is already going on and nobody is stopping it as of now.

Here are two examples of short sale fraud I have seen.

1.)   A real estate agent takes a short sale listing.  He tries to influence the banks BPO agent to give a low price.  If he is able to negotiate a low price below market value he has a "friend" buy the property.  The friend buys the property and then the agent re-lists the property after a little fix up.  The agent gets some of the profit from the sale and gets the listing commission too.

2.)   A seller hires a real estate agent they know to get ready to list a short sale.  The sellers friend or family member with a different name gets another agent.  The buyer tells them they know of a short sale that is coming on the market. The same day the house comes on the market before anybody else can bid on it the sellers friend or family member puts in an offer.  That offer goes into the bank because the listing agent is using first in only.

Other higher and better offers come in, but the sellers agent disreguards them because they use the "first in" rule.  They dis reguard their obligation to get the best deal or highest offer for the bank.  They protect the seller.  The seller's friend or family member buys the house.  The seller continues to live in the house.  The seller's friend either leases it back to the seller, or has the seller pay the mortgage payment to them.

The short sale seller has bought their own house back at a much lower price than they originally bought it for with the aid of their real estate agent.  They have beaten the bank out of money and helped commit mortgage fraud. 

It's happening already and I don't think the banks or the FBI is going after these people individually.