Fraud in Foreclosed Homes Sales

HUD.gov

 Issues - what is fraud and what is fair rules? 

1) HUD - investors are bidding on these houses, swearing they will be owner occupant.  paying cash 5,000 to 10,000 over list price and HUD holds bids until they get the price they want. Some RE agents will not allow peopel to do this, others do a wink and nod to get buyers to bid. AT any rate, legally, HUD cannot sell to those that are investors until the house has been listed for over 15 days.  To my mind this is a mini-auction.

2) HUD has low cost home program geared to help low income.  originally if you were low income and a house had sat on market for over 6 months it could be bought for $1.00 -  those homes are sold to cities, and NON PROFITS for $1.00. Each $1 home is then either restored or sold "as is" - ----- when was the last time you saw a house for $1.00????? or $100  it isn't happening.  Those homes I am betting are going to governments to make money - like the 18,000 one in buckeye sold AS IS. 

3) Selling Banks (listings that use terms, REO, Bank owned, or Bank Repossed) are often, upon inquiry, sold to FHA/HUD/ and no longer handled by the bank.   FHA /HUD then may hold them for several months or one year not selling them, while they determine structural damage or title issues. 

3.5)  Example:  we heard of property for sale and checked it on Zillow and a Real Estate site.  since we could not locate the multiple listing number readily the first time - we checked with county records and determined BAC home loans owned the property via trust deed.  WE then called BAC who indicated that they are only servicing the property for the investor.  The investor is FHA - What the heck?  Upon a call to FHA (who was very helpful) it was determined it was not on their listings for sale, and being held for indetermine time.  We could check back periodically. We have been told the banks sell it back to FHA to get money back to cover their loss that FHA is taking them back as the insurer. (oh so they fraud people and give to the government - no wonder government doesn't seem to be effective in dealing with foreclosure fraud.)                                                                

4) HUD Money: While I think it is important to help people, why not get the money to them directly INSTEAD of announcments like this: 

HUD announced $15 million in grants to more than 200 local housing authorities through its Public and Indian Housing Family Self-Sufficiency Program last week. Communities in Chicago, Chillicothe, Ohio,Vineland, N.J., and San Antonio will receive grants to help connect families with important agencies and services. - HUD news June 7, 2011

Gotta love the banks and the government.  Helping low income?  NAH just improving communication! Let's just create more  hoops to jump through. 

photo: HUD.gov

AT this point in home hunting it is getting weary.  We are tired of several things 1) hearing one price and then finding out that a home has 5 bids within hours of a  listing   2) Finding HUD homes listed then sold for up to 10K more than listed price by investors 3) Finding home listed and discovering that it is not for sale because the banks aren't selling.

If we dont' find something soon, never fear - there is another foreclosure wave coming and it may be the worst drop foreclosures that we have seen to date.