For those of you who may have attended one of our short sale presentations, we have discussed our concerns about short sale fraud. It is our belief that many real estate professionals might unwittingly be parties to short sale fraud.
The issue involves the extent to which sellers are being properly advised and represented. The attached article underscores concerns that we have (and continue to share) with certain real estate professionals who represent sellers in short sales. If there is not a complete waiver of the deficiency, great care should be taken to achieve the best price possible for the property to minimize the deficiency consequence. Many real estate professionals assume that since the transaction is a short sale, the seller does not really care what the sales price should be. Nothing could be farther from the truth. As the sales price increases, the seller’s lender receives more money, thereby reducing the deficiency balance (and therefore the seller’s liability to the lender(s)).
We do feel that at some point, there will be a cottage industry of lawyers who will be approaching short sale sellers to determine if their interests were adequately represented by their real estate professional.