Andi Grant's Blog - Everyday Real Estate with a Twist

THE TIP OFF TO THE RIPOFF

"The cheaper the crook, the gaudier the patter" --Sam Spade in The Maltese Falcon

There are many of us who've had near entanglements with agents, lenders, inspectors, appraisers even clients who may have wanted our cooperation in what could only be defined as mortgage fraud. Below is just one mere 3-in-1 example I was reminded of today.  If you have any to share, please post them! 

Last year, I obtained a buyer through a friend's referral.  The buyer was a very nice young lady and highly motivated to buy.  She already had a lender that she was working with and wanted to keep him if possible.  No problem!  I asked to see some of her recent documentation so that I could see where we stood when presenting any future offers.  The pre-approval letter she handed me was very generic looking.  It was absent of letterhead and just didn't make the lender or my buyer look credible.  I called the lender directly to see how strong of a borrower she was and what type of lender he was.  During our conversation he talked really fast and wouldn't quite answer any of my questions directly. - Tip Off to the Ripoff

Me:  So are you guys a direct lender? 

ACME Lender:  Oh yeah, yeah, that's not a problem

Me (thinking) Huh?  Didn't my question prompt a simple yes or no?   

Me:  So you are a direct lender? 

ACME Lender:  Yes.

Me:  Great!  Well could you please send her over a revised pre-approval letter reflecting that because the home she has her eye on is asking for a direct lender or she will have to cross-qualify.  Oh and letterhead would be awesome (trying desperately to keep the sarcasm out of my voice!)  

ACME Lender:  No problem!  I can't do it right now because I'm headed to a meeting in a few minutes, but I'll send it to you afterwards. 

He ended up sending the revised letter a few hours later.  After seeing it I understood why.  It had letterhead from one of the major lending institutions and stated it was a direct lender.  The problem was, it wasn't the company he worked for.  It was signed by his brother who actually worked for the direct lending institution.  ACME lender guy couldn't quite see why I had a problem with it because it was such a little thing and people change lenders mid-escrow all the time.  Apparently he had done this with many other agents before.  My response was that I didn't have a problem with changing lenders what I had a problem with was :   1)  Frauding the listing agent and her seller  2)  Creating a fraudulent situation for the direct lending institution whose letterhead was misrepresented fraudulently and 3)  placing my client (who was also his)  in a position of committing a federal crime? Oh and did he also forget she was in law enforcement?  Not too mention what it would do to myself, my broker and everyone else that would be connected with it. My client was shocked, appalled and very annoyed and handled it accordingly. 

In this industry we are constantly challenged to either participate or look the other way when it comes to various methods of fraud on both the buying and listing sides.  It is imperative that individually buyers, sellers, agents, appraisers, inpsectors and lenders choose their Fraud Protection Team wisely.  One compromise in any of the above areas could bring down the entire team.