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HonestNJBroker
336 Posts |
 Posted - 08/17/2008 : 12:15:37 PM
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I have a client who is seeling their home-the person purchasing the home is the Broker/owner of the RE company. The client decides he want to purchase a property the Broker/owner ownes. Countrywide is giving me a VERY hard time about it. The property my client is purchasing is O/O-56LTV-709 middle score-I have a VOE only approval from Fannie and no appraisal needed.
Countrywide is giving me a VERY hard time about it. They took a week to U/W the file call me Friday @ 5pm and tell me we don't like the file-send us a LOX and other docs-the client is now freaking-settlement is to be this Friday-the Owner/broker calls me Saturday and says his regular mortgage guy spoke with their in house U/W and the in house says no big deal. I re-ran with Flagstar-same approval-spoke with my Flagstar rep who says "oh i quit friday but this does sound strange for people to swap homes"
Anyone else have ever run into this issue? Anyone have any sugestions? NJ prop. Thanks |
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HonestNJBroker
336 Posts |
Posted - 08/17/2008 : 12:22:38 PM
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coming from a guy with the screen name "huff paint" REAL PROFESSIONAL.
quote:
Originally posted by huff paint
usually the people who insist on telling eveyone they are Honest are the least honest of all
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slants
4274 Posts |
Posted - 08/17/2008 : 12:37:16 PM
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Swapping homes is not all that suspicious or even unusual in itself. The problem is all the non-arm's length situations occurring where the seller is also the listing/selling agent on all the closings. The realtor/seller should not be the agent/broker on any of the contracts. That's what's raising eyebrows. Lenders would have no desire to expose themselves to so much potential liability. If a dispute arises down the road due to the seller's misrepresentation as not only the property owner but also the buyer's representative, all parties involved will be named to defend themselves - seller, lender and you the mortgage broker.
They would be smart to have another RE broker write the contract so the loan submission will be a straightforward purchase with a buyer/seller/R.E. Broker, none of whom are the same entity, and the source of down payment can be documented by a Final Hud showing only the homeowner's side of the transaction and his cash proceeds for the sale of the current residence (the fact that his buyer will be same party as the seller would not even come up). |
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velecico
3997 Posts |
Posted - 08/17/2008 : 12:41:44 PM
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| Honest in NJ ? that in itself is a contradiction , starting in Trenton and working its way down , most corrupt state in the union |
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HonestNJBroker
336 Posts |
Posted - 08/17/2008 : 1:08:38 PM
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The broker/owner did is not the agent for the buyer-only in the property he ownes/is selling
quote:
Originally posted by slants
Swapping homes is not all that suspicious or even unusual in itself. The problem is all the non-arm's length situations occurring where the seller is also the listing/selling agent on all the closings. The realtor/seller should not be the agent/broker on any of the contracts. That's what's raising eyebrows. Lenders would have no desire to expose themselves to so much potential liability. If a dispute arises down the road due to the seller's misrepresentation as not only the property owner but also the buyer's representative, all parties involved will be named to defend themselves - seller, lender and you the mortgage broker.
They would be smart to have another RE broker write the contract so the loan submission will be a straightforward purchase with a buyer/seller/R.E. Broker, none of whom are the same entity, and the source of down payment can be documented by a Final Hud showing only the homeowner's side of the transaction and his cash proceeds for the sale of the current residence (the fact that his buyer will be same party as the seller would not even come up).
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slants
4274 Posts |
Posted - 08/17/2008 : 1:19:47 PM
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quote:
Originally posted by HonestNJBroker
The broker/owner did is not the agent for the buyer-only in the property he ownes/is selling
quote:
Originally posted by slants
Swapping homes is not all that suspicious or even unusual in itself. The problem is all the non-arm's length situations occurring where the seller is also the listing/selling agent on all the closings. The realtor/seller should not be the agent/broker on any of the contracts. That's what's raising eyebrows. Lenders would have no desire to expose themselves to so much potential liability. If a dispute arises down the road due to the seller's misrepresentation as not only the property owner but also the buyer's representative, all parties involved will be named to defend themselves - seller, lender and you the mortgage broker.
They would be smart to have another RE broker write the contract so the loan submission will be a straightforward purchase with a buyer/seller/R.E. Broker, none of whom are the same entity, and the source of down payment can be documented by a Final Hud showing only the homeowner's side of the transaction and his cash proceeds for the sale of the current residence (the fact that his buyer will be same party as the seller would not even come up).
So the buyer has his own selling agent representing him? |
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HonestNJBroker
336 Posts |
Posted - 08/17/2008 : 1:35:54 PM
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Yes-the agent WORKS for the broker/owner at the same company.
[[/quote]So the buyer has his own selling agent representing him?
[/quote] |
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slants
4274 Posts |
Posted - 08/17/2008 : 1:42:14 PM
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quote:
Originally posted by HonestNJBroker
Yes-the agent WORKS for the broker/owner at the same company.
quote:
So the buyer has his own selling agent representing him?
To clarify, the seller, listing agent and selling agent all own or work for the same RE brokerage? If so, the seller is the listing and selling broker for both seller and buyer. There are way too many non-arms length relationships going on here. The broker needs to remove himself or any of his agents from the transaction in my opinion. |
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HonestNJBroker
336 Posts |
Posted - 08/17/2008 : 1:57:08 PM
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The BUYER (my client) does not work in RE-Let's say he is a plumber-he lists his house with an agent.
The owner/Broker of the company who has the property listed wants to buy the clients house.
The client/plumber now wants to buy a home the broker/owner has for sale.
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slants
4274 Posts |
Posted - 08/17/2008 : 2:15:01 PM
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quote:
Originally posted by HonestNJBroker
The BUYER (my client) does not work in RE-Let's say he is a plumber-he lists his house with an agent.
The owner/Broker of the company who has the property listed wants to buy the clients house.
The client/plumber now wants to buy a home the broker/owner has for sale.
Yea I got that. For financing purposes, we only need to look at the plumber's purchase transaction: the seller is the listing broker on his own house that he is selling to the plumber. He also assigned an agent from his office to represent the plumber so he is actually the listing and selling broker as well as the seller. When the final hud shows up for plumber's own house as proof of down payment, the broker/seller's name is listed as the plumber's buyer who is contributing the down payment.
Non-arm's length deals have always been frowned upon in lending because any one party having too much control/influence and potential reward on a closing = added risk of fraud/litigation. The broker would be wise to have other RE brokers list and sell these properties, preferably differnt brokers for each property. He obviously would not want to give up the RE commissions, but his whopping commissions on all sides of the deals is yet another reason the deals may appear shady since he would have great incentive to commit fraud/misrepresentation to get them done. Way too much risk for a lender to want to participate in my opinion.
If he takes the convoluted agency relationships out of the equation, then the only hurdle will be the house swapping issue and that could be much more readily overcome. |
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HonestNJBroker
336 Posts |
Posted - 08/17/2008 : 3:45:56 PM
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| Problem I have being a BROKER is the RE has his "go to" in house guy who is a banker-he said he called the owner of the company and the owner said he would get his in-house U/W to approve the loan. I will get on thw phone tomorrow morning with Flagstar U/W help desk and see what they say. ***** because I have been dealing with this client since Nov 07. |
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slants
4274 Posts |
Posted - 08/17/2008 : 3:54:01 PM
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quote:
Originally posted by HonestNJBroker
Problem I have being a BROKER is the RE has his "go to" in house guy who is a banker-he said he called the owner of the company and the owner said he would get his in-house U/W to approve the loan. I will get on thw phone tomorrow morning with Flagstar U/W help desk and see what they say. ***** because I have been dealing with this client since Nov 07.
Good luck! The banker might approve the loan in-house, but he's probably gonna get stuck with it. That doesn't help you though. I think it'll be very unlikely to get any wholesale lender to take a deal with all the potential manipulation that could go on with their structure. |
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HonestNJBroker
336 Posts |
Posted - 08/17/2008 : 4:21:09 PM
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| Thanks |
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