All Forum Posts by: Sam M.

The top of a water heater has 2 sockets into which one must put a short piece of pipe (pipe nipple)
Look around the pipes on top and look for even a little water seeping out right next to the heater or where the flex pipes are attached to the nipple just a few inches above the top of the heater.

How old is the unit? While a leaking pipe does not call for replacement of the heater it might be better just to replace it if it is an old unit.

How old is the unit? If it is leaking out of the upper element/thermostat cover then the leak is likely on top of the heater. One of the pipe nipples in the top might be loose or damaged.

The pressure is constant and will be the same whether or not you turn on the water. The pressure across the entire city would have to be higher in order for yours to change and this would have to be drastically different in order to cause a leak. You would notice the faucet spraying VERY hard if there was enough pressure to spring a leak.

Mr. Gassett,
Do you really want to go there?

Here are a few untruths:

1 "The contract price that you have accepted from the short sale investor needs to be within a reasonable proximity to appraised market value or the short sale will be rejected. From an investors perspective they could care less because they have your home tied up and there is no risk to them if the transaction does not happen. They get their deposit monies back if the lender does not accept their offer. A short sale investor knows this and will put offers on many short sales hoping something eventually sticks.
The truth is that while value is a PART of what a bank uses to determine an acceptable payoff it is only a part. The other parts have to do with assessing the risk to the lender and using average losses/ expenses to come up with an acceptable number.
The truth is investors are prepared to close on EVERY deal they put under contract. The truth is it only happens 70% of the time. The truth is this is what RETAIL buyers are doing because the short sale is so unpredictable. Even though they put in 3-4 offers they really only want one property.

2 Your home will be off the market tied up for months with this investor while you wait for the banks reply. When it finally does come and the answer is no way Jose you will be starting from scratch and the foreclosure will more than likely be right around the corner. This scenario happens all across the country on a regular basis with short sales.

The truth is that an investor begins negotiations figuring the bank will not accept the first offer (believe it or not) but this is just the beginning of NEGOTIATIONS and gets the proverbial ball rolling. The truth is that if the investor has a buyer but cannot negotiate a spread the investor will back out of the deal and allow his buyer to buy directly from the seller even though he has no DUTY to do so.

3 It is much more routine for a lender to require a seller to pay back a portion of their short fall in order to close the property. An agreement to pay back a portion of the debt will become part of the approval letter. Typically the owner will be asked to sign a note where they agree to pay back a certain amount over “X†amount of time.

The reason why this becomes important when dealing with a short sale investor is because if they do manage to get the lender to approve the short sale you will more than likely be on the hook for a larger portion of debt than if you held out for something closer to market value.

The truth is an investor will do his best negotiate the deficiency away or down to a reasonable amount. After all what kind of idiot seller would pay for the investor to make a profit?
Are you seeing these promissory notes on your deals? If so it is no wonder you can close so many!!!! The lenders must LOVE you! If you are doing retail sales and cannot get the lender to release deficiency then you are not doing the best job you can for the seller.

4 Other measures have been put in place by the Treasury Department to prevent short sale fraud by requiring that the buyer and seller have no hidden relationship and banning a re-sale to take place in under 90 days.

You talking about HAFA? What a joke and a near total flop of a program just like any other time the federal government steps in to help.

5 Realtors that get involved with these kinds of transactions walk a fine line with getting themselves into a situation where they are clearly not working in the best interest of their client.

It depends on the track record of the person negotiating the transaction.


There are the ones I picked out in just a few minutes of reading it again.

Lisa,
I could have been more cordial with how I chose my words when I said you didn't have a clue.
I will try harder next time.
Cheers

I was thinking today about the discussions we have had about fraud and what it means. I got to thinking over the last several years of my construction career and realized I was just as passionate about exposing fraud as what I am seeing in the real estate industry/business.

Case in point: I bid on a commercial job a few years back that was 65,000 square feet with 7 levels stepping back from a shoreline with an additional 40,000 square feet of deck over each roof system. I bid 900,000.00 to frame this project (including fasteners, crane and equipment but not materials) and was beat by 250,000.00!!!! You may say 900k! No wonder you were outbid! Here is the kicker. The only other crew that bid was a crew that had been caught by the feds twice already for hiring illegals AND did not pay their workers as employees or cover them with workman's comp insurance but paid "by the piece". Their expenses were controlled by doing this and they didn't have to take the risk associated with paying by the hour and underestimating the number of hours it would take to complete the project. At 65,000/month payroll liabilities it can eat you up pretty quick.
It pissed me off! What were these clowns still doing in business? Doesn't anyone care that these people are cheating?

It reminded me of how the real estate agents react to what they believe is fraud. I would get all worked up over it and even lost sleep trying to figure out a way to get the clowns out of my world.

Anyone else have similar experiences?

The reason us investors get all worked up about articles like yours is that we run into agent after agent who will not work with us because of "all the fraud" rather than looking at each situation and judging an investor accordingly. I have talked to 40-50 agents in my area who talk about all the agents getting in trouble for short sale fraud but when asked for cases they can only give you the case in CT which all of us agree is fraud. Hey we actually agree on something!
Just to give you an example of what the FBI is actually doing check out this site and read down through the indictments. It is scary to realize all the fraud going on with agents, mortgage brokers, appraisers, investors, homeowners and the like. http://www.mortgagefraud.org/tampa-mortgage-fraud-surge/

Here is the page from the link where it gives the first few lines of each charge of the November 09 bust in Tampa, FL
The point is fraud is all around us.

Originally posted by Lisa Udy:

Hi Investors -

Sam wrote

"This agent while doing a great job describing an actual fraudulent scenario butchered it badly and showed that she really has no clue how these things work or what the real issues are."

Thanks for letting me know I have no clue, yet at the same time saying I did a great job explaining the situation. If you know so much about it, are you involved in these issues?

Thanks!

Lisa,
Wecome to BP!

You did a great job at the beginning of your blog spelling out how someone would get a higher offer then get an investor involved to make a lower offer.

You later went on to rambling about how investors blame the agents and take no responsibility. As I pointed out in a response EVERYONE involved in a deal like you first describe is involved in fraud not just the agent. Here is a direct quote from your blog: The fraud Bill describes makes it hard to determine the culprit. Many of the comments he received claimed that investors are not committing fraud, but the agents are.

They claim that the investors are just looking for a great deal. The fraud has nothing to do with investors purchasing a home for a great price and turning a profit by reselling the home in a flip. They say it’s the agents fault and the investors have nothing to do with it."

This is so not true. I do think that Charlotte went overboard saying the case in CT was just about agents because the one agent was also the investor (just in a seperate LLC) So this really was about investors but Lisa described this scenario perfectly. They got a higher offer then told the bank that the "investor/agents" offer was the highest offer on the property.

Here is where you describe it perfectly:
Bill describes real estate agents taking short sale listings, finding buyers to pay the market value for the home, and than having an investor on the side offer less than market value.

This is actually better than what Bill wrote because Bill put pretty much all short sale investors in the bin of "not in the best interest of the seller" not necessarily because of fraud but other reasons even though the title pretty much said what he was writing about was fraud.

Gota run!

Bill Gassett commented on another blog:

"What I have a problem with is every investor commenting who wants to throw a blind eye to the fact that there ARE investors that commit fraudulent activity. Some of the comments suggesting that they are looking out for the best interests of the seller are ludicrous."

The blog is found here http://homesforsaleloganut.com/short-sale-agents-and-investors-committing-fraud/comment-page-1/#comment-404

This agent while doing a great job describing an actual fraudulent scenario butchered it badly and showed that she really has no clue how these things work or what the real issues are.

I agree with Steve.

It looks to me like the owner may still be on title and the LOAN got sold to a mortgage company in NJ. If foreclosure has not been filed the home will not be on any list, pre-foreclosure or otherwise. In addition to this the mortgage company will not talk to you about the loan without an authorization from the home owner to do so!!!!!
There may be a way in through an attorney because the owner is deceased but I can't even point you in the right direction.

Nice job!

I am so used to seeing any real deals just swarmed with buyers (because the are few and far between) that I wasn't even paying attention when a 5 acre parcel with 2 homes and 4 septic systems when to auction at 85k (balance of first mortgage) and REVERTED TO THE LENDER. This place needed some work and was listed 30 days before the sale for 265k. I think it would have sold for 190k easy.

Might be something I couldn't see in the records that would have made it a bad deal.

Should have been watching!