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When will short sale negotiators for lenders be given ethics training or maybe it is just training in the 1st place?
One of the agents in the office has been “lucky” enough to hit the jackpot on out-ethics and, in my mind, suppressive individuals – whether working alone and under the guidance of a senior/supervisor.
First on one property the negotiator for the 2nd loan requested additional funds and wanted them not reported on the HUD1 (a governmental document designed to show exactly where money is going in the transaction). To have “hidden” funds is a violation of the law yet the bank’s representative requested it. My agent has to point this out.
HELLO!! If the banks don’t clean up their act they will sink into more problems again!
Second was a different property with two loans on it. A buyer came forth with an offer. The 2nd lender approved the short sale with $25K from the seller and the 1st lender. They gave the parties a whopping 23 days to close the sale. The problem was the 1st lender had not yet approved the short sale on their end. But the 2nd did not even consider 23 days (including weekends) is not enough time to have the buyer inspect the property, to get the new buyer’s loan approved, loan documents to title, get the parties in to sign off and close the loan. It is barely enough time to get a cash buyer sale complete.
Here is where the actions are suppressive. I will use an analogy. You are a baker and want to bake a cake. It takes 45 minutes to do (5 minutes to mix and 40 minutes to bake). Someone says they need a cake but they need it in 25 minutes or the deal is off. You try to see how you can accommodate the request. You mix faster and turn up the heat on the oven but even then you only get the total time down to 35 minutes for a cake that the person wants in 25 minutes. The person is setting the baker up to fail at the outset.
And that is what happens the seller is being set up to fail.
You might say “Why not get an extension?” This seems logical doesn’t it? Here comes the extortion plot just to really make your blood boil. Here comes the suppressive action. On this last example the letter from the 2nd lender stated that it would cost more if the property did not close on time. In my agent’s case the lender wanted $8500 more! Already they were getting $25K! Some from the 1st lender but more from the seller in an earlier extortion bid. The seller to accommodate sold a car and borrowed money from a friend but he has nothing more. Another analogy – this is like being raped again by the same party who raped you earlier.
The irony of this is the seller could have just let the home be foreclosed upon and have NO funds out of pocket and no deficiency because these were purchase money loans. He wanted to be more responsible and do a short sale (after all the home will sell for more in short sale than as a bank owned property).
If the seller decides enough extortion is enough he can just let it go to foreclosure and the 2nd lender would get NOTHING!
There needs to be a public outcry about the extortion and the out-ethics situation of requesting funds outside of the legal means. Care to comments?