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.

What does $1 buy you in housing - hang onto your hats - HUD to the rescue

IMAGE: HUD


After searching for homes and talking in person to the people at HUD about foreclosures and recovery, I learned a few things. HUD Secretary Donovan Announces 2.1 Million in New Grants for Seven Homeless Programs in Arizona.  Grants are to assist the situationally homeless and not chronically homeless. Grants are administered by the states through local progams.


Here is the link for Arizona resources.  If you live in another state just click on this link to find information. 

WHAT DOES $1 BUY YOU IN HOUSING????

 HUD has many programs such as the Good Neighbor program designed to help firefighters, teachers and other public service workers substantial discounts in housing.  We are talking 50% discounts.  There are also discounts for Hurricane Evacuees. Programs exist for Indian (section 134), Aids, and for Public Housing residents. In addition each state has programs available such as the information found on HUD's Arizona homeownership page.  There is also the new EHLP program but it is not taking applications. But the program that seems the most exciting is the $1.00 program. 


Hang onto your hats it is not as good as it sounds. After a cursory reading on the program I determined to find some homes that fit the criteria. If you are low income,  and can find a home that has sat on HUD's site for over 6 months, it appeared that you could buy it for $1.00.  I can no longer find that wording and have included the official wording found today on the HUD website, at the end of this posting. 


After talking to HUD officials it seems that only government agencies such as the city of Phoenix or the counties or states can buy these homes for $1.00.  The government then rehabs the homes and sells them on the market.  Yup government helping the low income again (not). 


Here is the information if you are wanting to learn about this program and address your local administrators.  The wording might make you think it is available to homeowners for $1.00 but the revisions clarify a bit that only governmental agencies can buy these $1.00 homes. 

About Dollar Homes

HUD's Dollar Homes initiative helps local governments to foster housing opportunities for low to moderate income families and address specific community needs by offering them the opportunity to purchase qualified HUD-owned homes for $1 each.

Dollar Homes are single-family homes that are acquired by the Federal Housing Administration (which is part of HUD) as a result of foreclosure actions. Single-family properties are made available through the program whenever FHA is unable to sell the homes for six months.

By selling vacant homes for $1 after six months on the market, HUD makes it possible for communities to fix up the homes and put them to good use at a considerable savings. The newly occupied homes can then act as catalysts for neighborhood revitalization, attracting new residents and businesses to an area.

Local governments can partner with local nonprofit homeownership organizations or tap into existing local programs to resell the homes to low- and moderate-income residents of the community.

To find out if properties are available for sale in your community, visit HUD Homes and click on your state.

 Recovery Act Grants:  

*CREATIVE COMMONS

HUD AWARDS $118 MILLION IN RECOVERY ACT GRANTS  (AZ). Special grants were awarded on April 28th to help states combat rural homelessness. $2.1 Million was awarded to Arizona and are accessed through 7 existing homeless programs.

House Hunting, Fighting Foreclosure and Government Grants for the Homeless

Well the banks successfully evicted us after our year long battle.   Using last year's judgement instead of going through the forcible detainer (eviction) again.  Bankruptcy for some will still be a good option for fighting through the legal system. Make sure if you go through bankruptcy that you learn as much as you can FIRST, or have a very trustworthy person guiding you.

For other people doing a  notary complaint process and documenting the fraud for a lawsuit will be a better answer.

Going through this process has taught us a lot.   Find your alternative housing long before you end up evicted.  It is not dishonest to plan ahead, the banks are a business and all is considered as contract law. It is not dishonest to plan to take care of your family while fighting the fraud and  negotiating with the banks to honor THEIR contracts. For instance have they fulfilled the obligation for the qualified written request within 90 days? Have they committed TILA violations, have they broken Fair Debt Collection Act? Were you robo signed?  There are many FRAUD issues.  Make sure to check out showmetheloan.net or the blogs listed in my blog roll to the right to educate yourself on more issues.  You can also check past blogposts on this blog using search for key terms.

REAL ESTATE: LARGEST GOVERNMENT LAND GRAB

Right now we are seeing a new thing on listings for homes for sale by banks.  In our search for cheap housing we found that HUD is awesome source of free housing - FOR INVESTORS.  The government in it's land grab has taken over most loans from banks via Fannie and FHA etc.  They account for about 63% of real estate listings.  This means that the government is the direct benefactor of  "non performing assets".  Remember these mortgages were sold to investors already (money made) then again were paid for with insurance funding for investors and insurance when house was foreclosed on.   Now the government owns them free and clear and unlike a straightforward real estate advertise, buy and close - they are holding out for highest bidder.   We found this out when looking for a 37,000 piece of property with trailer that was advertised as available.

So essentially the government is grabbing homes with a call to increase the foreclosure process, then they are holding up people from investing outright in a new home by bid competition-AND on the other hand they are spending money to fight the homelessness they are inflicting on people.  Remember in foreclosure you have 5 days to get out, once the bank notifies you. Technically once the auction or trustee sale has happened - you are homeless, until you can have it overturned.   The government is in control of about 63% of those foreclosures, they could stop the train there, instead they are granting millions of dollars to homeless programs, including a new 16.4 million to combat rural homelessness.   Hard to say this but we are now one of the homeless, partially due to the lack of action by government in dealing with the fraud.  AS with any other government process, funding will be hard to access by those who need it. 

But I digress, back to the house hunt. We went and talked with neighbors of the advertised home,  who told us that the home had sold one month ago for several thousand over the asking HUD price. The happy new owners and paid out cash total of something like 63,000, obtained keys and were waiting for the green light to move in or rent it out. We quickly learned that HUD advertises one price, then holds out and extends the listings, waiting for highest and best cash offer.  INVESTORS are snapping up the medium priced properties. Thank you government for not stopping robo signing, fraud and correcting wrong - but for taking advantage and lining the  coffers of the governmental 'spendaholics'.  Does this type of thing sound familiar? Fix and Flip prior to the housing crash?

BANKS DEFENSIVE ADVERTISING

On Trulia the real estate owned by banks (REO) is being advertised in a very defensive and inaccurate statements.   HERE is a sample wording from one listing:

Bank Repossessed. This property has completed the foreclosure process and is now owned by the foreclosing lender, which took title to the property for an estimated consideration (loan balance plus other fees and costs). Foreclosing lenders are often motivated to sell bank-owned properties (also known as REO, or Real Estate Owned) quickly because they are non-performing assets. Please register for a free trial with RealtyTrac to access complete information for this property, including full address, foreclosure details, lender information, and more. 

If you have been following this blog and others you will know that the foreclosure process is not complete - there is the return of the security instruments according to UCC 3 -501 B.  There are many lawsuits and possible clouded title.  Chain of title could still be compromised.  They have taken title alright - stolen in many cases from owners who have not questioned if all payments were applied to the mortgage or if they were target of toxic loan or robo-signer.   The fact that they are advertising this is troublesome to many in the t foreclosure fight arena.

WE ARE WORKING ON IT!

Now we are back to square one working on our legal processes, while looking for a place to house us for the next six months to one year.   We are also rebuilding our business.   WE are in temporary situation and life is good.  If you hear of a great property with cheap housing for under 50K let us know.. or a home to care-take while the homeowners are fighting their foreclosure. :)  Let us know how your foreclosure fight is going by leaving a comment.