So, a colleague who represents a Buyer just contacted me.  The Buyer's offer was submitted to Greentree who has the 1st and the 2nd.  They have verbally approved the short sale BUT, the Buyer is being REQUIRED to "pay $5,000 Outside of Escrow - cannot show anywhere on the HUD".  Of course we all know this is illegal as does my friend.  But, the Listing Agent made the counter-offer on behalf of the lender and told my friend that if the buyer doesn't accept it, they will throw the offer away and accept another offer that is willing to pay Greentree "Outside of Escrow / not on the HUD".  Has anyone else seen this from Greentree?  I suggested my friend contact the local District Attorney's office.  Thoughts?

Thom Colby

Broker

Newport Beach CA

Views: 327

Replies to This Discussion

I would think the consumer may want to get further information and possibly file a complaint.

 

http://www.federalreserveconsumerhelp.gov/?District=13 

Hi Thom, while this is probably illegal, you are still in the negotiation process and they can really ask for anything they want.

 

I am curious if the buyer countered with the $5k on the HUD, if they would approve or decline.

 

While I have dealt with some pretty hardcore lenders and a couple of them have countered with "money going to them off of the HUD" I have never had any of them decline the offer if we countered back with what they want, but it goes on the HUD.

 

I have had a few clients pay second's off of the HUD, but they usually receive a better discount on purchase price. (I leave it up to the buyer what they want to do when this situation comes up)

 

If the buyer counters with the $ going on the HUD, please post a reply here and let us know what happened.

 

-Mark

Hi Mark -

It's actually not my transaction.  It is a friend of mine's.  I saw the letter from Greentree - it's very interesting.  They are being smart enough to ask for the payment to be made "Prior to" close of escrow - so it would simply be a payment made on behalf of the borrower against the debt - then they will report the loan as "paid satisfied for less than the full amount" and remove their lien from Title prior to closing of the short sale escrow for the first lien holder.  It's an interesting "tactic", but I suspect the 1st might have an issue with it except it's also Greentree servicing for an investor.

Best,
Thom

 


Mark Stafford said:

Hi Thom, while this is probably illegal, you are still in the negotiation process and they can really ask for anything they want.

 

I am curious if the buyer countered with the $5k on the HUD, if they would approve or decline.

 

While I have dealt with some pretty hardcore lenders and a couple of them have countered with "money going to them off of the HUD" I have never had any of them decline the offer if we countered back with what they want, but it goes on the HUD.

 

I have had a few clients pay second's off of the HUD, but they usually receive a better discount on purchase price. (I leave it up to the buyer what they want to do when this situation comes up)

 

If the buyer counters with the $ going on the HUD, please post a reply here and let us know what happened.

 

-Mark

I would accept the counter them instruct the title company to place the $5,000 on the buyer side of the HUD as a POC item. Let the title company fight with the lender over this very obvious RESPA violation. This deal will close.

Bryant,

          Great tactic, what is the first likly to say when the see this? I mean after all isin't that why the second wanted it off the HUD in the first place?

Rita. I've done this numerous times, including with greentree, and have bever had it questioned.





Rita Legan said:

Bryant,

          Great tactic, what is the first likly to say when the see this? I mean after all isin't that why the second wanted it off the HUD in the first place?

Hey Tom.  Just saw your post, so it's too late to offer practical advice on how to get the deal done.  But as to Green Tree's modus operandi: this same thing happened to me with Green Tree about a year ago.  I can probably find my outraged emails/faxes to their upper management (President?, VP?, legal counsel?), manager and negotiator.  In my opinion this is a dirty, unscrupulous company and I will happily cooperate with anyone who has the time to put them out of business.

Yep - pretty bad stuff.  She turned them into the Orange County District Attorney when they "lost" the offer.

Neil Blumberg said:

Hey Tom.  Just saw your post, so it's too late to offer practical advice on how to get the deal done.  But as to Green Tree's modus operandi: this same thing happened to me with Green Tree about a year ago.  I can probably find my outraged emails/faxes to their upper management (President?, VP?, legal counsel?), manager and negotiator.  In my opinion this is a dirty, unscrupulous company and I will happily cooperate with anyone who has the time to put them out of business.

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