Realtor Going To Jail for Doing an A-B-C Short Sale?!

[Joe McCall]

Has anyone seen this yet? What are your thoughts?

http://www.loansafe.org/connecticut-real-estate-agent-sentenced-to-prison-for-short-sale-mortgage-fraud-scheme

Sounds like an A-B-C transaction to me - which happens all the time. Maybe she didn't have her full disclosures to the bank in her original offer?

[Bill Patterson]

This is an old case from a year ago and for some reason has just resurfaced again. I commented on this in a LinkedIn discussion, too. Here are the main points:

McElaney (listing agent) and Natera Already had an offer for $132,500 and inserted a lower offer to the lender, intending to keep the difference. THIS WAS THE FRAUD THAT THE COURTS FOUND. Had their offer to the lender been in place and was being negotiated BEFORE the $132,500 offer, there would be no fraud!

As members of BOS Asset Management, LLC the agents had a right to purchase the property as long as it was disclosed (which if I remember correctly without re-reading the whole case again, it was)

The lender is not the client of the listing agent, the seller is.

The agents have NO FEDUCIARY DUTY TO THE LENDER

The highest offer is not always the best offer. The best that can be done for the seller is to get their short sale with no deficiency.

One offer at a time is all that should be negotiated. The lender has no right to ask or be notified of other offers that may be held as back up or as an “end buyer”. Who ever has a contract to purchase is the one that has the right to have his offer accepted, countered, etc. before any other offer can be considered.

Bill