Replies to This Discussion

Permalink Reply by Smitty on September 3, 2011 at 2:29pm

Tara, while I don't think there is a legal definition of flopping if you use the Connecticut case of the two Realtors indicted for Mortgage Fraud (which is the only known arrest I know of short sale fraud) if you interject your LOWER offer in when a HIGHER offer was already signed and presented, I think that was part of the equation.  The fact they weren't reselling has nothing to do wiith it.

 

Tara, what was your situation?  Why did you call Wells Fargo?

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Permalink Reply by Bryant Tutas on September 4, 2011 at 1:15am

going in the newsletter today

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Permalink Reply by The Negotiator on September 4, 2011 at 4:10am

I think being a highly respected and talented agent only means one thing ... if he or she doesn't get their way, then, their ego gets hurt and someone must pay because this world has a hard enough time saying "my bad." Sad but true ...

I worked a deal where an agent didn't get a contract and they went to the BBB of KW ... of course it was laughed out and dismissed, but, it's really sad that agents ego's get in the way and make huge fusses over normal business activity.

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Permalink Reply by Jill P on September 5, 2011 at 5:03pm

 I'm sorry, but I think the banks have opened the doors for this type of thing.  If the banks made the transactions operate like equity transactions... ie:  a decently brief amount of time between offer and closing, then this wouldn't happen.   They lose the VAST majority of normal homeowners due to the time line, lack of repairs, mystery, etc... they are stuck with investors who are operating a business... to buy houses and resell at a profit or crooks who will take advantage of the gaping holes oozing dollars.  

 

If the BPO's and the fair market values were more transparent (like listing for xxx and reducing the price 30 or 60 days later if there are no takers), then they wouldn't have to lie in the bed they made for themselves.  

 

Now, just say for instance, that the underwater homeowner decides to sell, the bank cooperates in determining a listing price, an offer is made, accepted and escrow proceeds.  Wouldn't more regular people... Veterans, people with jobs, people moving into or out of an area... actual make offers on short sales if they had even just a small degree of knowledge about what they could expect?  

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Permalink Reply by Teresa Keeler on September 7, 2011 at 1:00am

I think one of the biggest problems is that using your very well presented scenario - about agreeing on a list price (this is how the HAFA program works among others)..... the problem you still have is market perception.  There is a "perceived" lower value in any distressed sale.  In PA - short sales sell for 17% below "market" on average and REO's at 36%. Banks however - in their infinite wisdom, cant get their heads out of their proverbial "a_s" to see that short sales will not command full market.  They will have you listing it way too high, then sitting on the market for way too long, then STILL take too long as in your example, to approve a contract that they should have already been on board with.

 

At the end of the day, our Government is going to continue to try to cover up all of their vigorous attempts to put anyone and everyone into a mortgage by allowing Fannie and Freddie to back loans that should never have been done - so what happens when the bank approves a short sale? They have to RECORD their loss! It makes their mistakes of the past more and more transparent as they do this and this is the fear - lower stock prices and bank failures. Someone has to suck it up and realize that there is no way to hide behind a curtain until the market does it's magical recovery - the banks have to be seen for what they are really worth before anything positive can happen with real estate prices.

 

So what is their ingenious solution?  Try to take the investors OUT of the market who HAVE capital to invest - have time and resources to see the process through and improve the abandoned properties.... all because they are afraid of appearing to have left money on the table by someone flipping the house.  PATHETIC!

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Permalink Reply by Teresa Keeler on September 6, 2011 at 5:44am

I couldn't resist - I had to post a LENGHTY reply on the MSN article.

 

Repeat after me folks - THIS IS NOT AN REO!!!! The bank has no say in who the buyer is and the lenders reviews a SIGNED CONTRACT not and OFFER!!!!

 

Investors bring a HUGE value to the real estate market and more often times, the investor offer is BEST for the seller and lender! We have the ability to negotiate things that normally can't be negotiated (like removal of late payments, no deficiency judgment for the seller, etc...) that please no offense - many realtors just are not trained in doing.

 

There is no better team of people to cure this market crisis than knowledgable agents and experienced ethical investors.

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Permalink Reply by The Negotiator on September 6, 2011 at 8:59am

You bring a tear to my eye with your logic and sound mind of Real Estate 101. You also bring a double tear to my eye about the investor team .. so true.

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Permalink Reply by P Nicolas Velecico on September 7, 2011 at 8:10am

 

 What a bogus article , but what do you expect from MSN , makes it sound like $200.00 and a " smelly " property can make you 50K on a flip , sorry I meant " flop" .

 

I cant wait till one of these cases actually goes to court and lets see if a judge sides with the banks

 

Bottom line its their asset and they have all the time and resources to decide if they want to sell , the banks have the same or more information as the agents listing the property , if they dont like the BPO or suspect that the property was " staged " to make it look worse than it is why cant they just not accept the offer and sell the home as an REO ?

 

Sounds like more sour grapes by a bunch of incompetent corporations

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Permalink Reply by Smitty on September 7, 2011 at 12:44pm

Harry,

 

Flopping is a small branch on the BIG mortgage fraud tree.  There is TONS of mortgage fraud out there, and very little in the way of short sale fraud convictions.  There is most certainly a correlation between the two but I could give you hundreds of scenarios that would qualify for mortgage fraud, probably find tons of articles about different types of mortgage fraud convictions, newspaper reports, etc, but Jeff's original post was about flopping, and if you do the research on flipping/flopping-fraud convictions, you won't find much.

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Permalink Reply by Kimberley Kelly on September 8, 2011 at 2:51am

Hmmm..love to hear you all disagree with such clarity!  Educating me and the masses here on SSS..thanks to you all.  I run into questionable Short Sale List Agents (home closes for much less than my offer and they've double-ended it), and also negotiaton companies that are shysters, BUT, if the offer is not executed, it is not an offer.  I often receive higher offers AFTER submission and the agents get mad.  I put them in back up..and point out that it's contingent as of 5 pm tonight or whatever.  The Buyer's Agents don't always know the facts on the List Agent side and if we are doing our job, we are trying to get an offer in under the "timeline wire" for that particular deal, for that particular Seller.

One thing for sure..I price my Short Sales RIGHT.  Depending on the Sale Date, the Seller, the area, it is priced at FMV less about 10% and the offer submitted is the BEST offer for that situation.  Maybe there were other factors involved here? 

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