Short Sale Fraud Situation in Natomas About to Hit MLS

It is a federal crime to commit short sale fraud.

Talk about the signs of short sale fraud. My mouth fell open when I read the email from a short sale agent in southern California who proposed we work together on a Wells Fargo short sale in Natomas. He obviously found my name online because I am a well known Sacramento Realtor who also has closed more short sales over the past 10 years than any other single agent in town. I am sharing this story with my readers as a public service. I hope none of you ever get involved in a situation like this, whether you are a buyer, a seller or a Sacramento real estate agent.

What’s more astounding is after I pointed out at least 6 possible infractions, the agent still clung fast to his plan. He offered to split the commission with me, but the money is immaterial. I value my real estate license and my integrity.

This guy’s plan, let’s call him Moe, is to first underprice the property by about $100,000. He thinks he can do it because he’s been talking with Wells Fargo about this short sale supposedly for a year and pushing for that much lower sales price. It’s possible his clients have filed for bankruptcy as there seems to be a lawyer involved in this suspected short sale fraud. Not to mention, a year is too long to negotiate with Wells Fargo. Something else is up.

At first glance you might say the superficial price doesn’t matter because the property will be for sale on the open market and the highest offer will prevail, especially in a seller’s market like our present market in Sacramento; but the way Moe wants to structure this, that will not happen. Moe claims he has successfully closed lots of short sales over the past 8 years by doing what I imagine authorities would call committing mortgage fraud, short sale fraud, and / or violating the Code of Ethics.

Besides underpricing the property, Moe intends to cut out buyer’s agents from the sales equation by offering a ridiculously low commission in MLS to buyers’ agents. He was very clear in his mail about focusing solely on dual agency. Moe calls it “maximizing our work and sales commissions.” I call it price fixing, bulldozing the Sherman Act, and violating Articles 1, 2 and 3 of the Realtor Code of Ethics, but let’s not quibble. On top of this, he wants to charge the buyer $10,000 for negotiating the short sale, a service I offer FOR FREE to all of my sellers as part of my commission and fiduciary duty.

I considered simply paying Moe a referral fee and handling everything myself, to ensure the short sale was conducted in accordance with real estate law and the Code of Ethics. After reflection though, I have passed. Because there is really no way to enter into a relationship with Moe and keep my hands clean. Some of that icky shit would rub off somewhere. That’s not an association any Realtor needs. Nobody needs to get mixed up in short sale fraud for any reason. Oh, there’s never a dull moment in Sacramento real estate.