Saturday, January 16, 2010

Sellers Contributions or Kick Back of Any Kind is Mortgage Fraud, Banking Fraud, Tax Fraud and Creates a FALSE Real Estate Market.

Real Estate Whistleblower Complaint
Crystal L. Cox
Real Estate Industry Whistleblower

Sellers Kick Back - Sellers Contribution at Closing - Sellers Cash Back

Sellers Giving Buyers Money for Any Reason Creates False MLS Data, and is Fraud on the Banking Industry, I don't Care what your Realtor tells you....

Still the Banking Industry with the Help of the Realtors and I Guess the Mortgage Broker are Convincing Sellers that it is Ok and Legal to to Participate in "Sellers Contributions" or other ways that a Seller Ends up Giving a HUGE amount of Money back to the Buyer.

Oftentimes it is done Like this and The Mortgage Broker Calls it a Sellers Contribution.

The purchase price is Say $200,000 and the offer Comes in at $215,000 and the contract says that the Seller Will Contribute or whatever Wording works good in your area, it is still the same meaning... the Lender takes this as the Buyers Down Payment so they can FORCE the Buyers Loan THROUGH when Really the Buyers Does not have a down payment. Oftentimes this is even given back as Cash the Same Day as Closing, Flat Out CASH to the BUYER and the REALTOR tells the Seller it is Legal. Wonder if the Realtor Gets any Kick Back from Deals Like This? Anyway...

the Lender KNOWS, because the Lender Sees the Buy Sell Contract, they know that the BUYER does not REALLY have the Down payment, so what do they do CHANGE the Contract to Submit it to their Loan Approval Department ?

Appraisers Know, because most ask me for a Copy of the BUY - SELL so they can then make an Un-Biased Objective Market "Opinion" on the Value of Your Home.

So it is Just Matter of Fact, and No one Seems to Be Concerned, or Was ever Concerned that it was Creating "Values" that were not real and people were paying Higher and Higher Prices based on FALSE - MisLeading SOLD Data.

The Motivation - greed of course because these Middle Man Lenders, Mortgage Brokers that Deal With Lenders that Deal with Banks and on and on, often times they Get Commissions for the Life of the Loan which Can REALLY ad UP. The Realtor who pushes the deal gets the One Time Commission... well more on that later.. (there are oftentimes other kick backs)

Sellers Contributing Money to Buyers so they Can Get a Loan is Bad for Comparable SOLD Data, it is Bad for the Fraudulent Bank Loans that Put the Homes Value quite a bit higher, it is Fraud on the banking industry no matter how you look at it, it is Bad for the Seller as they Pay Capital Gains Tax on this Money - most won't mind because it is included in their Free Equity with the Capital Gains Exclusion - which is Still Fraud on Someone.

There is no Rational way to Say it is OK, it is Simply NOT the SOLD Price, and it makes the SOLD Data Wrong which affects the Next Sale. It is FRAUD, no matter what anyone is telling you.

If the only way a Buyer Can Buy a Seller's Real Estates For Sale is if the Seller Fakes a Down Payment so the Lender thinks that the Down Payment is Coming from the Buyer and will therefore give the Loan, Well then the Buyer Cannot Afford the Property and Will eventually Lose it Anyway.

From the Seller's perspective, many take the Deal because they NEED and Want to Sell and they don't worry of the Tax because it is Tax Free money anyway. So the Buyer gets the Property with no money down, and NOT with a NO Money Down Loan... the Lender makes it look like there is a Substantial Down Payment.

Still in 2010 this is Going on, after Trillions in Bank Bailouts Due to the Fraudulent Secondary Loan market, Still the Realtors are in the Field Bringing Contracts that Make it So the Buyer is Getting their down Payment from the Seller. And Shocking but I am Getting Reports that not only is this going on for Down Payments but to actually give Cash Back to the Buyers.

And the Realtors are Telling the Sellers that this is Absolutely Legal. You see the Buyer gets this money the day of Closing, so what in the World would STOP the buyer from taking the Cash Back saving it, staying in the home til' the bank throws them out.

Then After months of Free Rent when Foreclosure finally happens - the Buyer just walks away, Cash Stowed away and Money Ahead. Or the Buyer may use this money for the payments for awhile til' the get on their feet per say. The thing is, that Buyer Could not afford the Home. And this Real Estate Transaction Scenario is bad for the Real Estate Industry and Should be Regulated.

And it all Originates with the Realtor pushing the Deal on the Seller so the Realtor Gets Paid, Now it looks like the Seller gets Paid too. The thing is, in the long run the bottom of the Game Falls out, because it raises the VALUE in the MLS Data and the Next Person to buy, say the house next door, the Appraiser does not know to Compensate 0r Change the Data on SOLD information to "Correct" for a Scam that he did not know about.

So we know that the Seller is Liable for the Extra Money they did not really get, because the Tax Man looks at the Settlement Statement and you Pay based on the Selling Price. Now if there is a 1031 Exchange involved, where does this leave the Seller Kick Back Scam. Well then I guess it would be some sort of Tax Fraud.

Because your Exchanging the $200,000 you REALLY got, but the Paperwork says you Got More then that... how do Realtors Explain that to Sellers. It looks to me like the Realtor just gets loud and Says it is Legal and the Seller Sits down and Shuts up...

Now What about the Buyers Tax Consequences in this Situation?

Well when the buyer goes to Sell the Property. They Paid $215,000 - yet they Really Paid $200,000 so if they sell for $215,000 they have no gain right? But in Reality they Really Do have a Tax Gain. And this is Legal to the Realtor, to all who let this Contract go through... which would include the Title Companies, the Lenders, Banks and Mortgage Brokers?

Also what about the Buyers Income Tax, Well they were Flat out Given $15,000 and they won't claim it because the Seller Claimed it and it was Tax Free, if it was Capital gains to the Seller and not part of their "Exclusion" well then the Seller Paid the Buyers Tax based on Capital Gains when Really it was Income and Income to The Buyer.

Does the Realtor Disclose to the Buyer that when they Sell, their Tax base is $215,000 and not $200,000? From what I see when this situation arises - no one explains - DISCLOSES any of this implications of all of this To Anyone.

No one is Policing the Real Estate Industry, the Ground Level where the real corruption and problem is No One is Looking. And well the Players at that Level they are Just trying to Make a Living and they don't get paid for their Hard Work unless there is a Closing.

So the Pressure To Close the Deal Surpasses the Integrity of the Deal and the Protection of the Consumer gets lost along the way. Meanwhile, the False Values and MLS Data increasingly Becomes False and then SHOCKING now people have loans for more then their real estate is worth. And the Lenders that allowed this Fraud - that Blatantly Allowed Appraisals to Come in High and that allowed Sellers Contribution that Created the Market Collapse - they Get a Bail Out. The Home Owner should Flat Out Get a Debt Reduction.

Lenders, Banks, Local And Federal Governments are Ignoring this is Fraudulent Behavior that affects every aspect of the Real Estate Industry.

This is Fraud Against the Stock Markets based on the Secondary Lending Market, which Let's Face it the Entire Economy is Rooted in the Real Estate Industry and without integrity there, without real values and The Controlling of False Bubbles a Collapse is Un-Avoidable. Never think they did not see it coming, they created it and the socked away plenty of Money for the Cartel at the Top of the Lending Industry.

Realtors in All this, well they Do the Dirty Work. And most just want to Close the Deal and do not look at the big picture of what it is doing to the market. The Realtor, as does the other parties to the Transaction, they just want a pay check.

IT is up to the Regulators of the Real Estate and Lending, Banking Industry to STOP this madness and even in an Economic Collapse and Real Estate BUBBLE Big Time Burst, this Stuff is Still Going on. Oh wait there is No Regulators... and the "Voice of Real Estate" THE " National Association of Realtors" well they don't care and they are NOT interested in Lobbying for things that actually HELP the Real Estate Consumer.

And the Realtor in all this, is Telling the Sellers it is Legal, and So is the Mortgage Broker. And the Realtor is NOT disclosing the Tax Consequences, the Mortgage Fraud Aspects and simply pushing the deal through.... even Right Now Today...

The Real Estate Industry is Broken and NEEDS a Complete Makeover - RIGHT NOW....
National Association of Realtors, SEC Violations, Anti-Trust Violations, RICO Lawsuit.
More on my Yammerings on the Real Estate Industry at
National Association of Realtors, Sellers Contribution