A short success story.
I fought Nationstar on Auction.com and won. Lots of research on this forum helped and I even got a call from an agent in another state that really helped guide me. The short story, we (the buyer) were in contract with money in escrow and NS pull the Auction.com card. We had a mediator on the deal and she eventually elevated this to upper management at the "Auction.com department at Nationstar." They finally capitulated and said the program was, in fact, optional. We were allowed to proceed normally with our short sale. We closed last week. Horray.
You can fight Nationstar on this. They know sellers are over a barrel and are trying to get any money they can for the house. While that is understandable, their tactic is not.
Fight on.
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Sean Ryan,
I did exactly what you advised and Nationstar backed down and my client did not have to go through Auction.com. My client's lawyer sent a letter to Nationstar (through Equator) basically saying:
"The seller is opting out of the Auction.com program. The property has been listed with a Realtor and a qualified buyer has been obtained at fair market value. I see no reason why the seller should be forced to use Auction.com and breach the contract with the current buyer.
"Auction.com is a kickback program, which provides Nationstar with a financial incentive for steering Sellers' home sales into purchase by Buyers who are paying a secondary Buyer premium benefitingAuction.com and Nationstar. This violates RESPA's steering provisions against lenders who would require Sellers to use settlement services which provide a kickback to the lender. You have already ordered and obtained a third party value opinion, which is the industry standard for offer value validation, so any requirement to use Auction.com is clearly designed to add unauthorized and illegal financial benefit to Nationstar, NOT to "validate" offers. If you intend to decline our sale to force us into your settlement steering policy, please do so promptly and in writing, so that we may add this case to any class action that may be forming, and to our AG/DOJ complaints."
Within a few days, Nationstar sent the same letter back asking the seller to sign/date and return it to Nationstar. Then 5 days later, Nationstar said that the seller does not have to use auction.com. Of course, Nationstar warned that the short sale may be denied/closed and the property may go to foreclosure if the seller does not agree to use Auction.com. But I advised my seller/client of the risks and advised her not talk to anyone at auction.com or at nationstar about auction.com. Nationstar backed down. Auction.com is the biggest headache, if you read any of the reviews online, it's atrocious. Biggest scam.
I hope this helps, and thank you Sean for letting us know about this way out!
If anyone has any advice, that would be appreciate. I had the homeowner type and sign an opt out letter. A representative t the Auction.com department told me to do this as well as escalate the issue with the negotiators manager. I finally got a hold of Sam Ross, manager for the Auction.com dept and he was completely unhelpful. I know they will push this, but they are refusing to even look at the offer we have.
How can move forward? Is there anything specific I need to mention???
HELP
Hi there,
this sight has been extremely helpful in uncovering this HUGE SCAM. We put an offer in two months ago and just found out from the realtor about the auction.scum process. The realtor hadn't heard anything about this so obviously thinks that it is just part of the process. I'm sure the sellers already signed the agreement to move forward. Is there any way to cancel the agreement after the fact?
This strategy by Nationstar clearly violates state and federal laws against steering, and also violates consumer privacy laws. My suggestion would be to warn your Sellers that Nationstar's strategy to sell the property on Auction.com will at best reduce the offer price by 5% (the amount of the mandatory Buyer premium) which will increase their deficiency amount. At worst, it may get them foreclosed, or even put them into a contract dispute with a Buyer who already had a contractual right to buy the property, which in most states is contingent only on lender rejection.
Do not let the Seller sign anything from Auction.com, or from Nationstar authorizing Auction.com. If Nationstar passes your customer's contact information on to Auction.com, file a complaint against Nationstar for violation of consumer privacy laws with the Consumer Financial Protection Bureau (https://help.consumerfinance.gov/app/mortgage/ask). They are not allowed to pass information to a third party without specific written authorization to do so. I also have my Seller sign a letter that requests no phone contact from the lender whatsoever.
When Nationstar inevitably threatens that your short sale will be declined/foreclosure initiated for your non-compliance, the following response will fit into the Equator message field limit:
"Negotiator Name:
Per our conversation, you have stated that you will decline our file because we have not agreed to participate in the Auction.com kickback program, which provides Nationstar with a financial incentive for steering Sellers' home sales into purchase by Buyers who are paying a secondary Buyer premium benefiting Auction.com and Nationstar. This violates RESPA's steering provisions against lenders who would require Sellers to use settlement services which provide a kickback to the lender. You have already ordered and obtained a third party value opinion, which is the industry standard for offer value validation, so any requirement to use Auction.com is clearly designed to add unauthorized and illegal financial benefit to Nationstar, NOT to "validate" offers. If you intend to decline our sale to force us into your settlement steering policy, please do so promptly and in writing, so that we may add this case to any class action that may be forming, and to our AG/DOJ complaints."
We need to stop these lenders from using illegal tactics to bully our Sellers and steal our commissions. They are the reason this has happened to our customers, our industry, and our nation in the first place.
Sean Ryan,
I did exactly what you advised and Nationstar backed down and my client did not have to go through Auction.com. My client's lawyer sent a letter to Nationstar basically saying:
"The seller is opting out of the Auction.com program. The property has been listed with a Realtor and a qualified buyer has been obtained at fair market value. I see no reason why the seller should be forced to use Auction.com and breach the contract with the current buyer.
"Auction.com is a kickback program, which provides Nationstar with a financial incentive for steering Sellers' home sales into purchase by Buyers who are paying a secondary Buyer premium benefitingAuction.com and Nationstar. This violates RESPA's steering provisions against lenders who would require Sellers to use settlement services which provide a kickback to the lender. You have already ordered and obtained a third party value opinion, which is the industry standard for offer value validation, so any requirement to use Auction.com is clearly designed to add unauthorized and illegal financial benefit to Nationstar, NOT to "validate" offers. If you intend to decline our sale to force us into your settlement steering policy, please do so promptly and in writing, so that we may add this case to any class action that may be forming, and to our AG/DOJ complaints."
Within a few days, Nationstar sent the same letter back asking the seller to sign/date and return it to Nationstar. Then 5 days later, Nationstar said that the seller does not have to use auction.com. Of course, Nationstar warned that the short sale may be denied/closed and the property may go to foreclosure if the seller does not agree to use Auction.com. But I advised my seller/client of the risks and she decided to not use auction.com. Nationstar backed down. Auction.com is the biggest headache, if you read any of the reviews online, it's atrocious. Biggest scam.
I hope this helps, and thank you Sean for letting us know about this way out!
Well done. Good for you.
same here. If we use the same contact person hopefully we can get our files to move forward. My seller is in Ca, and is scared he will be sued by the "potential" buyer who has a valid signed offer.
I am trying to make this happen right now.. Just filed a complaint to fannie Mae.. I have gotten nowhere with Nationstar!
Kathy, Are you telling me the NS is trying to push a FNMA back property to Auction.com? I know some people at FNMA who would be very interested in learning about that. Contact me kevin@kevinsellstheupstate.com
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