Freddie Mac Clarifies Short Sale Fraud Definition

Like many diligent short sale specialist in other parts of the country I have been fighting for transparency in short sale transactions in Oklahoma City. Finally, Freddie Mac has made it very clear that certain third party interventions into short sales are clearly fraud. The press release was issued om May 16th. In precise language they define that someone coming in and making a contract on a short sale, then try to hire you to sell it for them, do a same day close, and pocket the difference is an act of fraud. We know this but it is nice to finally see something in writing.

In the last month, I have been approached by two different Realtors who are members of the local Board, and been asked to participate in a fraud, but telling me all this information you are hearing is wrong about it's legality. In both cases, these are Realtors who I feel are so desparate from not making sales, theat they are willing to turn a blind eye to the truth. it doesn't stop there. One local agency who will go nameless even has an addendum to a contract offer I might create for one of their short sale listings that basically says I won't be closing with the current owner by from this "investor" who is pocketing the difference. Sad but true, and all of this information is going to our State real estate commission. Integrity and ethics in our business should be upheld to the highest standard, and this should not be tolerated regardless of ignorance.

For those of you who work short sales and are willing to be a part of this fraud should realize that this is your fraud too. Vicarious liability makes you a party to this. At the very least you should lose your license on ethics violations. When you took that listing your job was to represent that client in trouble and keep them from foreclosure and harm's way. You are ethically bound to also be honest with the lender taking the loss. Ask yourself is it ethical to keep $10,000 from the lender and give it to someone who merely signs a contract with no intention to close it unless you sell it again before the due date? But speaking jusr from my sense of fashion, I know that orange is not a good color on me, and i just hate jump suits. You should too.

Thanks to Alex Charfen founder of CDPE who has been relentless in his pursuit of short sale excellence. The example Freddie Mac used is exactly quoted from a CDPE white paper on short sale fraud. If you are an Oklahoma City homeowner in mortgage distress and want some answers to what you can do about it, go to our short sale site, www.avoidforeclosureoklahoma.com. You can also contact us at joe@joepryor.com.