A few days ago I wrote about how the purchase offering process is having issues… issues that are especially apparent on Bank-Owned Properties (we call them REOs).

Banks are often requiring that ALL offers be accompanied by pre-qualification letters from specific approved lenders (perhaps even from their own loan department).  In other cases, the brokers representing the properties are interjecting this “requirement” on their own.

This morning, local (and nationally syndicated) radio talk show host, Clark Howard mentioned

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Probably not…

But that doesn’t mean that people aren’t trying it… and it doesn’t mean that people aren’t getting in trouble for it.

Here is the way it works (and it all sounds so legit…):

• Mr. and Mrs. Consumer buy a house and get a mortgage from MonsterMegaMortgageCompany (MMMC).
• MMMC sells their mortgage to Investor Pool #1.
• Then it is bundled and sold to IP#2… and #3 and #4 over a span of a few years.
• Mr. & Mrs. Consumer start having problems, and despite everything they are facing foreclosure.
• To try to get help they contact a “Foreclosure Mitigation” Law Firm that fights the foreclosure by filing a “missing title” lawsuit.
• The law firm (or other entity) charges an up-front fee (maybe $2000) and then monthly fees (maybe $1000 or $1500)… as well as a contingency fee upon settlement of either 50% of the reduction or 75% or 80% of the value if the mortgage were completely eliminated.
• After stringing along Mr. & Mrs. Consumer for a few months or longer (collecting fees), they fail to actually prosecute the case.
• Mr. & Mrs. Consumer lose their home…

According to a few of the sources I looked at, their are no recorded examples of any suit of this type EVER being resolved in the consumer’s favor.

The basis of the lawsuit is that if the mortgage holder can’t produce the documents from the mortgage, it will be set aside and the consumer will own their property free and clear.  Sounds nice, huh?

Before getting sucked into something like this, here is a little more reading…

Source 1

Source 2

The State of California is going after one of the firms involved in this practice.  I would expect that there are similar cases in other states.

Times are tough…  scamsters know it, too

People being foreclosed on are all over the place.  They are vulnerable to people that approach them to “help.”  There are a variety of scams and plans that mostly just revolve around generating a profit for the “helper.”

Be careful!  There is help for many home owners that are in trouble… but the easy sounding solutions often aren’t what they are cracked up to be.  If it sounds too good to be true, it likely is…

I would love to lose my mortgage, too… but this isn’t the way…

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I’ve seen an annoying new trend.  Buyer and Seller “Broker Fees”.  It may go by various names, but amounts to the same thing…  what Clark Howard would call a Junk Fee.

Entrance to Baltimore

These are quite different from the other fees that may be involved in a real estate transaction, and there are a LOT of fees.  The lenders have fees, the closing attorney has fees, there are state fees, county fees, insurance fees, delivery fees…  Simply put, buyers and sellers are paying plenty of fees.  Adding some BS junk fee like a paperwork fee, transaction fee, administrative fee or broker fee is just adding insult to injury.

There is already a commission or sales fee that the real estate broker and agent are sharing.  There is no reason to add another official sounding fee on top of this that is after the negotiated amounts.

And, that is how it usually works… the seller negotiates the fee for selling their home, and everyone shakes hands… and then the agent mentions that there is a $495 paperwork fee or something along those lines.  They say it is required… maybe not saying that they are the ones requiring it…

In the case of buyers, after going through the buyer’s agency agreement and telling the buyer that the commission is generally paid by the seller, they hit the buyer up for a transaction fee… again, saying it is a requirement.

There are various reasons for this…  What it mostly comes down to is that people and companies in the real estate industry are hurting for income.  But, many of our clients aren’t exactly rolling in money… and even if they were, it isn’t right to tack on junk just because we think we can… Some agents are working for companies that charge US a closing fee for closing a transaction instead of charging a split and the agents are passing it along.  It should be part of their cost of doing business.

I just say NO!

No additional fees.  You will know EXACTLY what you are paying for my services prior to delivery and prior to completing the negotiations.  I try to deliver more for EVERY client than other agents… but that doesn’t mean I need to add junk fees on top of fair fee structure.

And there are some different options available for sellers… but that is another post.

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Just something I’ve noticed…

In hockey there are players tasked with protecting their teammates.  They are referred to as enforcers…  I’ve had the opporunity to meet three of them.

• Jeff Odgers – Former Thrashers player
• Eric Boulton – Current Thrashers player
• Dan Sullivan – Gwinnett Gladiators player

Jeff is well known to Atlanta hockey fans, and VERY well liked.  In 2002 he won the Gilner-Reeves Community Service Award for his efforts off the ice in the community.  This past season, the award was split between Eric and Garnet Exelby (“X” is another of the Thrasher’s enforcers).

Dan is also a big supporter of the community.  He is a partner in the Come and Get It hockey camp.  Their goal is to help kids play better hockey… and they offer scholarships to help make sure that money isn’t an obstacle.

It is kind of ironic that the guys that make their living fighting ON the ice are often the ones that give the most of themselves off the ice… or maybe it isn’t so surprising.  On the ice, their role of enforcer is also that of “protector of their teammates”.  One could say that off the ice they want to help protect their communities.

And Atlanta seems to respond with open arms to the guys that protect their teammates!

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