Today, the Oregon Attorney General’s office is hosting a short sale and foreclosure fraud symposium , for industry professionals, at the Portland Convention Center. Hundreds of agents and title company professionals are in attendance.
One of the topics on the agenda is when does a short sale crosses the line and become fraud, a scam, or even a crime? When does a borrower or lender become harmed, unlawfully, by a short sale ?
Certainly, not all short sales or loan modifications are fraudulent. But, any financial information withheld, left undisclosed, or other details omitted in a short sale request could be deemed fraud.
The FDIC has a bit of red flag list of things to watch for, here are a few of the flags noted:
*Selling to a related party of non-arms length party.
*Re- occupying the property after the short sale is approved, or any time in the next 5 years.
* The seller getting any cash back in the short sale process.
* The seller fabricating financial hardship , or purported hardship that does not exist or match the credit profile.
*Seller or selling agent withholding competitive offers.
If you’re applying for a short sale or a modification treat it much like a loan application, disclose the following regardless of if youre asked for a or not, and don’t leave out a thing :
-A full month of pay stubs.
-Two months bank statements.
-Two years W2s.
-Two quarters of any IRAs or 401(K)s statements,
-Two years returns, all schedules, federal only
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