I was recently advised that BOA recently restricted all agents of a large brokerage because one short sale file allegedly contained fraudulent document(s).  Furthermore, when any of these agents jumped ship to another brokerage because of their inability to utilize Equator their accounts remained restricted based on their prior involvement with the original brokerage.  If any document(s) were fraudulent they would have been provided by the Seller, not the listing agent.  However, BOA appears to be holding the brokerage and all of their associates responsible.  This has presented further problems in that this restriction applies to all other lenders utilizing Equator.

The question for this discussion is has this occurred to anyone that you have heard about?  NAR is currently working to resolve this issue and we would like to know if this is wide spread or just an isolated situation.  

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Hi Stephen, Curious to know know which brokerage?

I could see Bank of America restricting the agent but to restrict the brokerage and all of its other agents seems a tad excessive. Must be an error. 

Thanks for the info, BoA pulled one of are short sales the day before funding, saying it was a senior Mtg order, however BoA has told us we are planning to close within a week.    

 

Does anyone know who the Brokerage is?

 

Thanks again for the timely post…

What do you mean pulled the short sale?  They refused to approve the HUD?  They voided the short sale approval?  On what basis?  I hope they had a good and proven reason for that ... there is a buyer that definitely stands to be damaged at that point.  I'm really interested to know their reasoning and approach on that.  What a nightmare.

The problem with this is, and BOA knows this and something most agents forget or pretend to forget is that : Real Estate agents hold no fiduciary duty to a third party lein holder. So any 'fraudulent' activity by agents are null and void. A contract is between two entities. A meeting of the minds. Clear and simple.

Brian - Freddie Mac has an addendum to the purchase contract that both listing and selling agents and title company officers have to sign stating that they don't know of any fraud happening...and...it survives closing.

Obviously this is a huge problem for us, as there could be no fraud up to the day of closing, but how are we supposed to know what happens after closing? 

NAR is taking steps to get this addendum changed/withdrawn, as it leaves open a huge amount of liability on a lot of parties. Our broker now requires we run all required bank/lender addendums for all short sales by her before we sign. Sometimes they spring these addendums on you/your client while you in for the signing.

Susan in Sunny, Arizona

Brian. I believe you need to consult with an attorney about that. Fiduciary and Fraud are two different things. You certainly don't have to be a fiduciary to commit fraud.

No, this is not accurate information.  Agents should not be committing fraud or knowingly assisting in fraud... PERIOD.  You also learn this when training as an attorney... we cannot knowingly assist in a fraud.  Not many things will cause you to lose your real estate license, but this will.

I know the bank's definition of fraud tends to be "anything that negatively affects them that they willfully turned a blind eye to previously."  So, it becomes hard to respect them.  After all, their massive fraud is a big part of the problem we are dealing with now.  But, let's not go losing our heads here.  They may not know what fraud is, but often we do, and it should be avoided at all costs.

what is not accurate? No one is saying that to knowingly commit fraud. But fraud is subjective in this case.

Great line...  "anything that negatively affects them that they willfully turned a blind eye to previously." How true...

is that a legal opinión?

How does one bad apple spoil the bunch? Strange, I can't see how an agent committing fraud translates into all agents being penalized for the action of one. I understand broker liability but I still can't see how brokers suffer the sins of perhaps one fraud perpertrator Otherwise, there would be a lot of agencies out of business. Unless this company has a track record doesn't sound right. How about if we were to penalize the banks for committing mortgage fraud and fire all the employees within the banks?  Or fire all the bank employees for not issuing loans and making it harder after receiving bail outs? That would be just about as unfair as this sounds. There are a lot of hard working agents out there with distressed clients doing the right thing, would this not effect the deals presently with the brokerage who are in active short sales?  Or are they reordering the short sales to go with other agents the bank has selected?  Crazy stuff!

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