Deb Espinoza's Real Estate BLOG

The question that comes to my mind these days is When does a lender qualify as doing illegal dealings in this mortgage crisis debacle?  I see outrageous things that make you go hummm....  Take the foreclosed upon house for instance. I pull title and see that say RESMAE Mortgage Corp owned the  $200K loan that foreclosed, however, when the foreclosure recorded it showed as a SALE to Deutsche Bank for $1000 at a Trustee Sale. This property was actually an REO being serviced and sold by Ocwen. FYI- This title now creates a Red Flag on the new buyer who now gets to pay for TWO appraisals because the FHA requires this when a property sells for more than 100% of the last sale (which in this case was $1000).

So- I ask myself, "What is the reason for these strange title recordings?" Do you think it may be a banking 'magic trick' used to transfer properties back and forth strategically in order to make the most of the write offs and book cooking to take advantage of OUR funds so willingly given by the government to help these poor little banks from failing?? Is this strategic loss shown on the books of $199K plus helping these lenders ? and how nice for Deutsche Bank or Ocwen Loan Servicing who actually showed as the "seller" on the REO to get a house for $1000 that they then turn around and sell for $140K.  I'm just asking... and certainly wish I knew where to dig for answers to expose this.  Come to think of it, I recall a Ramona Realtors meeting sometime last year where a person on the legal affairs committee said that the Feds were investigating some property switching by BIG BANKS.. (BofA rings a bell in my memory) So say Big Bank 1 forecloses on a house with a loan for $450K and they turn around and sell to Big Bank 2 for 150K who immediately is able to get an offer and sell it for $380K... and apparently they were alternating sales back and forth. Now I never heard any more about it- but it sounds awful shady to me.

Now I see the new 'Perpetrator' as Chase bank.  All of us who work in short sales know that the SOP for 2nd liens has currently been $3000 max to the 2nd for lien release, and since that is what the Majority of the Big Banks were doing to their second lien holders we, in negotiating releases for the seconds that they owned, used this as a 'fair play' rule.. saying that since that is all you are willing to give a second then this should be what you will accept when you are the second. And yes, they capitulate and take the $3000. But wait! Chase apparently now has a much better idea, being all warm and fuzzy customer service like. Seeing as how they know the max they are going to get on a 2nd lien in a short sale is $3000 they have found a way to realize immediate gains. Yes! "Let's SELL a boat load of 2nds to a collection agency and get more than the measly $3K"  Brilliant. Thank you Chase.  I had a offer and HUD in to Chase that had approval from the first lien holder- we kept being told by Chase that we would have an assigned negotiator any day-- for two months we waited. Then lo and behold we call for our regular check up on status and are told the loan was sold to collections. Some place called Regency... and strange enough too that all their correspondence lists BOTH Regency and Chase Bank on it.  First Regency tells us they have to have approval from Chase then Chase says they have nothing to do with the loan because they sold it.  Could there be a possibility that a lender creates a 'strategic' alliance or actual other entity to 'sell' it's bad assets to?  I'm just asking...