Home Selling in 94597>Question Details

2elders, Home Seller in 94597

misled and deceived by real estate broker.what recourses. loan modification paid up front. no results, ended up with short selling homes (2).

Asked by 2elders, 94597 Sat Dec 3, 2011

short sale listing kept "in closed circles", i.e. limited exposure on the open market. Short sale benefited lenders who got their minimum price the lender would sign off. Broker's advice was also to withhold mortgage pmts to pressure lender to cooperate, which did not work. Broker advised clients to hold off filing bankcruptcy as this would stall the shortsale, and as a result the 2nd mortgage lender had to be paid off, which would have been wiped out if bankruptcy had been filed. All in all, broker profited from the transaction and clients losing big time

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7
Steve Hansen’s answer
It sounds like you were the victim of a scam. For starters, it is illegal for a broker to collect an upfront fee for assistance in a loan modification. You mention several different parts to your situation that “smell bad” including short sale listing “kept in short circles”, Broker’s advise to hold off on filling a bankruptcy , and advising you to stop making mortgage payments. A broker should always advise you to get legal advice from the appropriate professionals, such as an attorney so you can make informed decisions. You should have started with a good understanding of all your options and the potential consequences. I would need to know all the facts to render an opinion on the degree of wrongdoing or malpractice committed by your broker and the merits of your position. You should consult a good real estate attorney. If the broker is a Realtor®, you have a good first option. You could file a complaint with the local board of realtors, where the Realtor is a member. The Realtor boards have a grievance committee that can determine how well-founded your complaint is and how many articles of the Realtor’s code of ethics have been breached. Most Realtors are ethical and professional and put their client’s best interests first, but like any profession, there are a few bad apples out there. Another problem is that some agents are honest, but unconsciously incompetent and don’t even know they are doing something illegal, giving bad advise and/or creating poor results when good results were possible! Here is the best analogy: An auto mechanic is very honest, but he is not competent enough to diagnose the problem with precision, so he uses a “process of elimination” replacing the wrong parts at your expense, until he finds the one bad part! You are no better off than if you choose a “competent” dirt-bag, that intentionally does over-kill work on your car to jack up the price! Best of luck!
2 votes Thank Flag Link Sun Dec 4, 2011
2elders:

"loan modification paid up front."

You have a bunch of "moving parts" going on here. I have to agree the prudent step is to obtain your own legal representation to review your case. Based on your allegation that you recently paid an advance fee for a Loan Modification an illegal act has taken place.

As of Oct 11, 2009 (via CA Senate Bill 94 -Calderon) it has been ILLEGAL for ANY person (including lawyers, real estate brokers, real estate salespersons, corporations, companies, partnerships, or any other licensed or unlicensed person or party) to request/take any monetary consideration up-front for loan modification work/services, or mortgage loan forbearance.

Below is an 8-page DRE Fraud Alert regarding Loan Modifications suggesting you report your alleged advance fee violation to the California Attorney General and California Department of Real Estate. In addition, if a lawyer; company or entity claiming to be attorney-backed/attorney-affiliated is involved, it goes on to suggest you also report any alleged violations to the California State Bar.

http://docs.Steven-Anthony.com/LoanModFraudAlertDRE.pdf

Best, Steve
0 votes Thank Flag Link Sun Dec 4, 2011
This is one of those rare times when I will recommend consulting an experienced RE attorney. There are just too many issues here and unless there are members on this thread who are experienced in these issues I would strongly recommend that you seek counsel. It's unfortunate that we have to put up with unscrupulous RE brokers who only serve to taint the water for those of us who endeavor to play by the rules and ethics of our industry.
0 votes Thank Flag Link Sun Dec 4, 2011
There are multiple issues here:
1.) "loan mod paid up front" sounds like one of those scams where you pay them $1500 to save your home; If a Licensed Real Estate Broker was involved, it may be grounds for losing license.
2.) "Shortsale kept in closed circles"; don't understand; either it was LISTED, or it wasn't.
3.) "minimum price" on a Shortsale is between the Bank and the Buyer, no effect on Seller.
4.) "hold off filing bankruptcy", this would be probable to allow the Shortsale to go thru.
5.) "2nd mortgage holder" should have be taken care of; in California, there is no Deficiency Judgement, if the Shortsale went through, the 2nd was satisfid, one way or another.

If these answers do not suffice; then there is more going on here, and more info is needed.

Good luck and may God bless
0 votes Thank Flag Link Sun Dec 4, 2011
2elders,

I'm sorry to hear about this happening. I would advise you to contact a real estate attorney about this, especially the part about paying the loan modification up front.

Good luck.

Angie Simpson
Coldwell Banker
0 votes Thank Flag Link Sat Dec 3, 2011
If you feel there was fraud involved, and especially if money was paid up front, or they provided you what sounds like it could be construed as "legal" advice, please contact an attorney and you may want to contact the Department of Real Estate and /or Attorney General office too. Both have divisions for what they will call mortgage fraud. This is very serious and I wish you good luck.
Web Reference: http://www.diablovalley.net
0 votes Thank Flag Link Sat Dec 3, 2011
The issues you raise are very serious. There are all kinds of things wrong with what happened. You need to get off the internet and contact a local real estate attorney.
0 votes Thank Flag Link Sat Dec 3, 2011
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