Short Sale, Foreclosure and Strategic Default


Tuesday, December 16, 2008

Short Sale warnings - Prosecutors are going after borrowers

Early on in my blogs on the subject of short sale - I warned Realtors that they should be careful about reviewing sellers finances and then submitting them to the bank.  Especially if the sellers fudged on their loan apps.

Now you can see why.

Someone explained on one of my other blogs that these people should have the finances reviewed and possibly submitted under an attorney client privilege. 

Prosecutors Going after Fraudulent Mortgage Borrowers - Seeking Alpha
From Inside Mortgage Finance:

While lenders are coming under increased pressure to help borrowers avoid foreclosure, the U.S. Attorney in San Francisco has launched an effort to pursue fraud cases against subprime borrowers who lied on their loan application.

“In my way of thinking, it didn’t make any sense for us to excuse any one component of the group that was involved in this phenomenon,” said U.S. Attorney Joseph Russoniello. “So while we obviously have an interest in the predatory lending practices, we’re also finding from our investigators that significant numbers of borrowers submitted falsified applications for a mortgage.” [Emph. added]

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