User-agent: * Allow: / Legal news, political opinion, Satire, and lawyer thinking by Tim Paynter, Attorney at Law: Real estate short sale costs Realtor long years in jail - Be careful what you do!

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Saturday, February 13, 2010

Real estate short sale costs Realtor long years in jail - Be careful what you do!

How to do short sales
and go to prison
Sergio Natera guilty of mortgage fraud

Real estate is a hot commodity today.  If you know what you are doing you can find great deals in the market place.  The problem is, you have to work very hard to do it.  Some people take short cuts when their greed gets in front of their common sense.  Short sales can make you good money, but you have to follow the rules.

A short sale transaction involves a mortgage holder or lender entering into an agreement to release its mortgage or lien on real property in exchange for payment of less than the total amount owed on the underlying debt. Many short sale transactions are legitimate.

Sergio Natera is a licensed real estate agent in Bridgeport, Connecticut.  He had a listing on a residential property representing the seller, Regions Bank.  Real estate agents have a fiduciary duty to their clients to get them the best price possible.

"There is no 'get out of jail free' card in mortgage fraud'
On December 5, 2007, another real estate agent presented an offer on Sergio's listing at $132,500.  Sergio saw an opportunity to make a healthy buck.  He told Regions Bank the best price they were going to get after tough negotiations was $102,375.  The bank trusted Natera and sold the property.

"One thing is clear, real estate brokers should not buy
their own listings"
Who was the buyer?  Sergio is no dummy, he arranged the sale to a shell company, Boss Asset Management, LLC which he owned or controlled.  Boss Asset Management limited liability company bought the property in July of 2009.  That puts a year and a half between the purchase and the sale.  Normally that is enough time to claim the property went up in value after the purchase.  Unfortunately, the guy who was no dummy accepted the offer of $132,500 and laughed all the way to the bank.  At least for awhile.
Article continued below
The Selling Agent's Duty

"Assume that any real estate agent is a seller's agent until you know otherwise. In most states, a real estate agent is required to disclose which party he or she represents at the first substantial contact with a home buyer whether it's in person, by telephone, by mail, or in an email.
  • A seller's agent can help you find and purchase a property and may provide some of the same services as a buyer's agent, such as setting up your pest and home inspections and monitoring your progress from contract to closing.
  • A seller's agent must disclose material facts about a property. Material facts include things such as a leaky foundation or roof and other known structural problems.
  • A seller's agent cannot disclose personal information about the sellers or the seller's property, such as an impending divorce, foreclosure, or job change.
  • A seller's agent has a duty to get the best possible deal for the seller, so always assume that any information you give a seller's agent will be passed on to the seller. Never disclose your "top dollar" or any other confidential information to a seller's agent.
  • Working with a seller's agent may be a good choice if you do not wish to be tied to one agent. Seller's agents are compensated at closing from the seller's commission."
    While agency law differs by state, and therefore the obligations of the broker to the client may also vary based upon workng relationships and disclosure, in no case may a broker be dishonest with the parties he deals with.  When I seek the assistance of a professional Realtor it is a good start when the agency puts their obligations in writing as the Voss group has done so here.  Tim Paynter
Continuation of article
What Sergio and many others forget is real estate sales are cut and dry.  It is almost impossible to cover your tracks because of all the paperwork that follows the sale.  At least a bank robber, if that is what one wants to be, can make a run for it.  You can't 'steal' real estate because it isn't going anywhere, no matter how much you try.  So there it is, all of the evidence.  The rocket scientist ends up not being so bright after all.

Connecticut has one of those thar Mortgage task forces.  That is a fancy word for mortgage police.  These guys investigate funny looking transactions.  When they find crooks like Sergio Natera they go at them like a piranha.  There is no 'get out of jail free' card in mortgage fraud.
"United States Magistrate Judge Holly B. Fitzsimmons will hand down justice for mortgage fraud"

The FBI has a message for dreamers who listen to the real estate seminar guys selling how to get rich quick in real estate bunko:
"In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes."

If you have been the victim of mortgage fraud the task force wants to know.  You can call  203-333-3512 and ask for the Connecticut Mortgage Fraud Task Force.  Trust me, you will get their attention.  You can also send an email to justice for fraudulent short sales.
"You can make millions in real estate"
Sergio didn't get very far in his plea bargain.  According to Nora R. Dannehy, United States Attorney for the District of Connecticut, Sergio pled guilty to bank fraud.  United States Magistrate Judge Holly B. Fitzsimmons will hand down justice for mortgage fraud relating to a short sale.  The 35 year old real estate broker may have a lot of time on his hands to think about how to get rich quick in real estate, how to do a short sale, and how to do a real estate short sale legally.  You can make millions in real estate but it takes a lot of work.  One thing is clear, real estate brokers should not buy their own listings. 

If you live in Colorado and have been involved in one of these deals you might want to give us a call for a consult.  720-951-1700. 

The images you see are from Google Images, be sure to give them a try when you do your next blog!

1 comment:

  1. Choosing the correct short sale company is very crucial in these days when so many scams are discovered every day.