Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Anyone of the parties not submitting themselves to these guidelines and regulations
stipulated by the investor is considered an intent to commit fraud against the investor.
Again the commissions are not the agents to decide what to do with them prior to a
closing; it's the investor's money that's on the line. Any additional monies contributed
to the 2nd or 3rd is not allowed; this additional money that is assumed to increase the
settlement to these other liens should be going towards the first lien holder who is the
first and foremost person absorbing the most loss.
I hope this information sheds some light on your question; again these are the rules
and it must be adhered by all participants on a short sales.
Argggh! . I think we agree and you misunderstood my premise. I'm not saying the agent is going behind the investor's back to give money to the 2nd lien holder or trying to increase the settlement. There is no additional money involved. The agent asked for a certain commission payment. The investor is saying they will pay less so as to provide funds to pay off the 2nd. The listing agent is asking the buyer agent to also take less to share in the reduction. Now do we agree?
I do agree with you that if the agent directly negotiates with the 2nd and gives commission $ to the 2nd, then the 1st lien holder may have issue with that.
Argggh! . I think we agree and you misunderstood my premise. I'm not saying the agent is going behind the investor's back to give money to the 2nd lien holder or trying to increase the settlement. There is no additional money involved. The agent asked for a certain commission payment. The investor is saying they will pay less so as to provide funds to pay off the 2nd. The listing agent is asking the buyer agent to also take less to share in the reduction. Now do we agree?
I do agree with you that if the agent directly negotiates with the 2nd and gives commission $ to the 2nd, then the 1st lien holder may have issue with that.
If the investor allows this commission reduction it will go straight up to the first lien,
that's pretty much how it will end up; either way it still supports the idea behind the
guidelines that no one will receive anymore than what was stipulated.
The information that I'm providing is officially stated in the investor's and
lender's guidelines; most experienced realtors and closing agents should
be familiar with this regulation which is already understood by those who
are actively engaged in short sales.
The commission that these agents are receiving are not from the seller or
the buyers, instead is coming from the closing cost that the investor will incur
at day closing.
I'm a Loss mitigation analyst and negotiator representing lenders, mortgage
insurance companies & investors during preforeclosure sales.
I'm not a realtor or lawyer and am not giving legal advise, but do agents sign documention agreeing to these rules? I'm curious for agents to speak up about whether they've signed something agreeing to such rules. The lender really doesn't have any cause or ability to enforce such rules, unless they've been agreed up by the other party. If the buyer's agent( the OP is the buying agent right?) didn't agree then they don't have to abide by the rule, unless its the law(or some other rule they've agreed to in order to obtain a license be a realtor, get insurance etc), and not some rule the bank decided to have. And if this restriction isn't the law it can't be fraud, if the party hasn't agreed to this restriction, I don't think.
If the lender discovered this after the fact, what action could he take against the agent? I find it hard to believe that he is committing fraud(criminal). Are you aware of anyone( a buyers agent) being brought up on charges for doing what the OP is suggesting.
Do you think he could pursue the OP for his contribution to the lien? It's true the bank is paying the buying agent's commission, but he performed the work and he was paid, so even though the bank is paying him, its still his money, I think.
Again I'm not a Realtor and don't have any special qualifications to speak with any authority just giving my opinion.
I'm not a realtor or lawyer and am not giving legal advise, but do agents sign documention agreeing to these rules? I'm curious for agents to speak up about whether they've signed something agreeing to such rules. The lender really doesn't have any cause or ability to enforce such rules, unless they've been agreed up by the other party. If the buyer's agent( the OP is the buying agent right?) didn't agree then they don't have to abide by the rule, unless its the law(or some other rule they've agreed to in order to obtain a license be a realtor, get insurance etc), and not some rule the bank decided to have. And if this restriction isn't the law it can't be fraud, if the party hasn't agreed to this restriction, I don't think.
If the lender discovered this after the fact, what action could he take against the agent? I find it hard to believe that he is committing fraud(criminal). Are you aware of anyone( a buyers agent) being brought up on charges for doing what the OP is suggesting.
Do you think he could pursue the OP for his contribution to the lien? It's true the bank is paying the buying agent's commission, but he performed the work and he was paid, so even though the bank is paying him, its still his money, I think.
Again I'm not a Realtor and don't have any special qualifications to speak with any authority just giving my opinion.
If you read the Purchase Contract Addendum that should have been signed by all
parties engaged in this short sale; it would help clarify these concerns.
The investor's guidelines supersedes any lender's rules and regulations; lenders
or banks as you may know them are subjected to these rules for they service the
loans on behalf of the investor.
Again for the record the investor is not the bank as many suppose; and it is the
"investor" who is incurring these closing costs. Therefore they have decreed what's
permissible or prohibited during the negotiations of a short sale.
I simply analyze deals and negotiate the terms with all parties involved to reach
an mutual agreement that will satisfy everyone, so the homeowners will be rescued
from reaching a foreclosure thus preserving the family's integrity and their interest.
I'm not a realtor or a lawyer either but you should read and understand what you
sign before you engage in a short sale..........please seek legal counsel.
Last edited by loss.mitigation; 08-12-2009 at 04:33 PM..
I think it's important for everyone to realize that the investor loss.mitigation keeps referring to is the person or entity who loaned the money to the banks that are now being asked to take a short payoff. In the large majority of cases, the investor is either FannieMae or FreddieMac. It's the old Golden Rule in action...he who has the gold makes the rules.
The rules for closing real estate transactions are adhered to by banks, title agencies and real estate agents equally, and they are dictated by federal and state law. One of the rules is that every penny of the money going into and coming out of a real estate transaction is accurately accounted for on the HUD-1 statement. Not adhering to that rule is a felony--it isn't a matter of whether the agent has agreed to it. I'm sure no one reading this forum has a written agreement that they won't rob banks, but that doesn't mean they can expect to get away with it.
As a real estate broker, I'd like to address the original questioner, who if I'm not mistaken is a buyer's agent being asked to forfeit a substantial amount of commission in order to fraudulently close the deal. In your place, I'd be offended even if this weren't an illegal practice. You are not in any way responsible for the seller's debt. Nor is your buyer.
The apparent fact that the deal won't work without your contribution tells me that the seller's agent has not effectively covered all the bases. I would advise a client to walk away from the transaction unless the second lienholder can be brought into line with what the first has authorized. And if the client wouldn't agree, I'd fire the client. This deal is not worth breaking the law. It isn't just losing your license that's at stake...it's potential prison time.
I think it's important for everyone to realize that the investor loss.mitigation keeps referring to is the person or entity who loaned the money to the banks that are now being asked to take a short payoff. In the large majority of cases, the investor is either FannieMae or FreddieMac. It's the old Golden Rule in action...he who has the gold makes the rules.
The rules for closing real estate transactions are adhered to by banks, title agencies and real estate agents equally, and they are dictated by federal and state law. One of the rules is that every penny of the money going into and coming out of a real estate transaction is accurately accounted for on the HUD-1 statement. Not adhering to that rule is a felony--it isn't a matter of whether the agent has agreed to it. I'm sure no one reading this forum has a written agreement that they won't rob banks, but that doesn't mean they can expect to get away with it.
As a real estate broker, I'd like to address the original questioner, who if I'm not mistaken is a buyer's agent being asked to forfeit a substantial amount of commission in order to fraudulently close the deal. In your place, I'd be offended even if this weren't an illegal practice. You are not in any way responsible for the seller's debt. Nor is your buyer.
The apparent fact that the deal won't work without your contribution tells me that the seller's agent has not effectively covered all the bases. I would advise a client to walk away from the transaction unless the second lienholder can be brought into line with what the first has authorized. And if the client wouldn't agree, I'd fire the client. This deal is not worth breaking the law. It isn't just losing your license that's at stake...it's potential prison time.
I would agree with your comments with the exception that the investor is not
necessarily those mentioned above because there are others as well.
That's certainly true, that's why I said 'large majority'. Perhaps I should have said 'in many cases', instead. Hopefully the main point isn't lost, and that is that the rules are not made by the banks or even the investors, but by law and regulation.
I am getting into the house flipping business and need a negotiator to assist us in making our deals with pre foreclosure and foreclosed bank owned properties. Any suggestions?
[email]TULANE@ATRENTERPRISES.COM[/email]
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
. I think we agree and you misunderstood my premise. I'm not saying the agent is going behind the investor's back to give money to the 2nd lien holder or trying to increase the settlement. There is no additional money involved. The agent asked for a certain commission payment. The investor is saying they will pay less so as to provide funds to pay off the 2nd. The listing agent is asking the buyer agent to also take less to share in the reduction. Now do we agree?
