Quick Cash and Short Sales

CAN'T STRESS ENOUGH. BE CAREFUL. There are tons of these companies out there. What they try to do is low ball the lenders. If they can't lowball them, the propertty goes to foreclosure. Some have the seller deed the property to them. BAD NEWS. Sometimes they even put a tenant in the property, collect the rent and drag out the foreclosure for as long as possible to continue the rental collection.

They have nothing to loose and the seller has everything to loose. The poor seller thinks that their problems are behind them when in fact their problem is only beginning. They are not representing the seller's best interest, they are representing their own interest. THis is a money making scheme on their part. Among the other protential issues with these types of arrangements, you have a liabilty for violation of your agency relationship with that client.

Short sale departments for the lenders are not stupid. They know these companies exist and they do their due diligence. The other problem is the seller needs to give these companies access to all their personal and financial information. Would you be comfortable giving someone that is not representing you your social security, financial and personal information? Furthermore, for those of you that do shortsales, you know that it is difficult enough to get a bank to accept a reasonable offer, the chances of the lender accepting a low ball offer is slim. It is a numbers game to these guys.

Remember, if it sounds too good to be true, it always is.

I totally agree here. RUN DON'T WALK away from these people. In a previous post, "the only one they are taking advantage of is the bank". Holy smokes Batman...............where did we sign up to defraud a Bank? It spells disaster. I have actually had one of these offers on one of my short sale properties. After checking it out with two attorneys, CDPE and the local FBI office, we determined that Fraud is Fraud no matter how you disguise it.

It never ceases to amaze me at the number of crooks that come out of the woodwork to prey upon someone else who has fallen upon hard times.

I posted about this scheme not long ago. But I think banks are getting smarter, I just saw a short sale approval letter that specifically says home can't not have been in volved in a transaction for the last 90 days.. so that would disrupt the whole plan... don't fall for it. The only one with "quick cash" are these so called investors.

DR. ALLISON,

I would be very careful with this type of transaction. I'm in Florida and they have a similar "scam" going. It is known to us as an "Option Contract" or an "A to B to C Transaction" and it works likes this...although there are different variations. The "investor" will sign an option contract with the seller at a low price in which he has the right to cancel at any time. Then the contract goes into negotiations with the lender. At that time the property is put on the market, by a Realtor, trying to find a buyer (a buyer for $160, as you stated in your example) In the event they can find that buyer they will try to have the closing on the same day. In that case they give the $130 to the lender and keep the $30 difference between the two sales prices without investing any of their own money. It sounds OK, because everyone gets theirs.

The problems are these. Usually the lenders will require a "seasoning" of ownership in which they will require the owners to have a certain time period of ownership. There is also the question of getting the property approved for a price that they can make money off of. If they can't, they could cancel the "option" contract and leave the homeowners in a tough spot. In order for this work in the real world there would need to be some very, very good luck involved.

The investors can try these all they want and only need to be successful sometimes because they are not putting anything into this. The agents will give their name and time to something that will have very little chance to close. If things aren't done properly, there can also be a case of fraud. Here is another variation...there are investors doing this and making these contract a part of public records thereby clouding the title in the event a true buyer comes along. They will then charge a certain amount in order to cancel their "option" contract. Hmmm...extortion

I would stay away from this because it is only a money making scheme that can harm many, many people that will be looking for some kind of recourse....namely legal, or lawsuits. The lenders wuld be angry because they are not receiving market value and have been duped into taking less than they could on the open market to them have that property sold for a higher price on the same day. How do you negotiate with the lender without telling them they are getting market value? How do you make an argument that they should take the $130 without misleading as to the current condition of the marke? How do you get a BPO to come in at that level when it is not market value? Remember they are trying to get the $160 which is still probably below market because they need to get a quick contract.

On one hand these companies allow the house to be sold - we know most buyers don't wait, to it insures a closing.

One the other hand, when the lender excepts less, the seller could get a bigger tax hit. The lender even if informed of the second sale, may sue for fraud?

Alisa,

The problem is that usually these programs will only close IF the investor can make money. The homeowner's life and future are held in the hands of someone that is looking for a profit.

When the lenders and investors of the original mortgage are losing money, the homeowners is losing their home and getting hit on their credit...it doesn't sit well that everyone involved in this transaction is being held hostage by a person or institution that is trying to circumvent the system to make a PROFIT.

An agent that is dealing with these homeowners have the responsibility not put their clients in a situation where they can get hurt for the same of a buck. Their needs should come first and be the ultimate priority of the agent involved.

Can you say FRAUD! run!

Quoting CIndy Egeli:

CAN'T STRESS ENOUGH. BE CAREFUL. There are tons of these companies out there. What they try to do is low ball the lenders. If they can't lowball them, the propertty goes to foreclosure. Some have the seller deed the property to them. BAD NEWS. Sometimes they even put a tenant in the property, collect the rent and drag out the foreclosure for as long as possible to continue the rental collection.

They have nothing to loose and the seller has everything to loose. The poor seller thinks that their problems are behind them when in fact their problem is only beginning. They are not representing the seller's best interest, they are representing their own interest. THis is a money making scheme on their part. Among the other protential issues with these types of arrangements, you have a liabilty for violation of your agency relationship with that client.

Short sale departments for the lenders are not stupid. They know these companies exist and they do their due diligence. The other problem is the seller needs to give these companies access to all their personal and financial information. Would you be comfortable giving someone that is not representing you your social security, financial and personal information? Furthermore, for those of you that do shortsales, you know that it is difficult enough to get a bank to accept a reasonable offer, the chances of the lender accepting a low ball offer is slim. It is a numbers game to these guys.

Remember, if it sounds too good to be true, it always is.

Yes

Quoting Dr. Keith Allison:

A company recently did a presentation for my office which my broker fell to his knees for. The company, Quick Cash, wants to partner with realtors so they don't have to do the paperwork involved in short sales. The story as I perceive it is this: The realtor refers the potential short sale to Quick Cash. Quick Cash arranges the short sale with the lender and pays for the home. (In his example he used a home valued at $200,000...paying the lender 130,000 and the realtors commission for the referral. Next, he turns around and puts the home back on the market listed with the realtor and sells it for 160,000.) The realtor never touches the paperwork, yet collects commissions on two transactions.

Something just didn't smell right about this method. The Quck Cash presenter said he takes advantage of no one except the bank, plus the realtor is paid twice!

Apparently, Quick Cash is a network of investors who collaborate across the nation. It may be on the up and up??? Does anyone have experience with this organization?

Keith

This company takes advantage of "no one except the bank", eh? Why would a Realtor (or a Broker, for that matter) want to be a party to a transaction that takes advantage of anyone?

Just because something is not illegal, doesn't mean it's right. When the mortgage companies start figuring out they've been had, who will they go after? A seller with no money and no assets? Quick Cash? Oh no, see, they were just an innocent middleman, REFERRED TO THE SELLER BY THE REALTOR!! But the Realtor and his/her Broker can be sued in civil and, possibly, criminal court.

Jennie Blackburn, Redington Beach Florida