Bank of America, JP Morgan Chase, Citi Mortgage and other lenders, are finding ways to make money off of distressed homeowners who are trying to avoid foreclosure. Among them are allegations of illegal requests for up front cash payments from buyers and real estate agents, as part of their agreement to close deals on short sales.
A short sale requires the bank to accept less than the full mortgage amount of the loan.
Real estate industry insider Jeremy Brandt told CNBC, “at least 200 real estate agents said they have had these requests made by representatives of Citi Mortgage, JP Morgan Chase, Bank of America and other large banks.” .
The cash the lenders receive is not listed on HUD settlement statements as required by RESPA laws, which makes it illegal.
This type of fraud appears to be more prevalent in the case of second mortgage holders, which in many cases, end up with nothing in a short sale. However, the practice may not be excluded from primary loans either.
Kayte Gentry, of Keller Williams Integrity First Realty said, “I think it’s wrong, and I think somebody needs to hold them accountable.”
When questioned about claims of up front payments not listed on HUD statements, a.k.a. kickbacks, JP Morgan Chase had “no comment.” Bank of America and Citi Mortgage denied it.
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(Photo above/AP)
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