URGENT EMERGENCY NEWS!
EMERGENCY WEBINAR DISCUSSION:
Due to the important nature and immense amount of “buzz” it’s created we will be hosting an emergency webinar discussion on Tuesday April 20TH at 7PM EST.
This call will be packed, so we urge you to grab your spot now.
Click here: https://www2.gotomeeting.com/register/615006378
We will have Attorney Ron Ballard as our guest.
I don’t know how many of you have heard the news, but basically Freddie Mac published an incredibly controversial article on their website. (Here is the original Freddie Mac article: http://www.freddiemac.com/singlefamily/news/2010/0412_payoff_fraud.html?attr=EMC-SFNCAEFTSPF )
Here is a response to the article from Attorney Ron Ballard: ( http://californiashortsalelawyer.com/2010/04/freddie-mac-article-on-short-payoff-fraud/ )
This article puts some of the Short Sale industry in a negative light with little justification to accurately provide “facts” to the matter.
I’d like to take a minute to clarify these facts and clear up some confusion.
Basically, Freddie Mac’s article implied that some short sale transactions are illegal. They claim that if the seller has a higher offer on the table then they need to tell the bank about it before the bank accepts a lower offer on a short sale.
The example they give is this:
A guy’s house is worth $80,000 and he owes $100,000. He short sells for $70,000 and then the investor turns around and sells the house for $95,000.
In this simplistic example, the argument goes that if the seller knew about the $95k offer, then the short sale is illegal.
Now this type of article is going to get a lot of people scared for no reason, so let’s clear the air.
The article is misleading for the following key reasons (among others):
1) As long as full disclosure is made, this cannot be called illegal in any way.
2) The $80k “value” of the home is the distressed property value. The true value is much higher!
3) The bank on its own (or seller for that matter) could never have gotten the $95 offer. It takes a seasoned short sale pro to pull that off.
That last point is the most critical. The bank can’t claim that it could’ve gotten the higher offer. So since it’s only thanks to the short sale investor that the seller got the higher offer, there’s nothing illegal about it.
Hopefully this will help calm some of those fears. Freddie Mac states in black and white in its guidelines that short sales, done right, are NOT ILLEGAL.
Spread the word and make sure the short sale stays at the forefront of the housing recovery.
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