Thursday, December 3, 2009

Bulk REO, Fact vs. Fiction Part VII: "Fraud, Misrepresentation, and the Handling Thereof"

I don't know how I got this hat, but I guess someone HAS TO DO IT.

Two days ago my client and I were put on a call with what was supposed to be an asset manager for Freddie Mac. That person never made it to the call. Instead another "broker" got on the call and started dictating the way my client was to proceed including sending POF to this "asset manager". We said "fine", and simply wanted a confirmation that this "asset manager" in fact works for Freddie and has the authorization to sell SFR REO on their behalf and thus has a fiduciary mandate to vet potential buyers (and thus ask my client for POF). My client told this "broker" they will gladly POF to Freddie, but not to a "broker" or "title company" unless either are charged with that duty (and can be verified) by Freddie.

The pool of assets was an all AZ deal (a healthy 8 figures) that was allegedly for sale for around 50 cents of current BPO.

As the call proceeded we come to find out that this person DOES NOT work for Freddie Mac at all and is not an asset manager, but instead some "third party" that Freddie uses to sell bulk SFR REO. We said "great" let's do a quick verification of that fact and we move forward. The "broker" (which I have now learned is an attorney) hemmed and hawed and wouldn't let us do any verification and then wanted to terminate the call because we wouldn't follow "his" protocol stating "this isn't going to work out". ARE YOU KIDDING ME!

I then called Freddie Mac to inquire as to who this person was (as we now had the name of this "asset manager"). I spoke to the Director of Bulk REO sales at Freddie Mac (a very nice woman). She informed me that Freddie is just starting to entertain bulk sales, and there is an involved registration/vetting process for any buyer. They sell at 75-80 cents off current BPO, and most importantly the "asset manager" I was dealing with was in fact nothing more than an investor currently going through the approval process to buy in Bulk from Freddie himself.

Once again not a single piece of data that was represented to me or my client was true. A COMPLETE MISREPRESENTATION.

I don’t know about you but I am no longer willing to tolerate the fraud and misrepresentations I encounter on a weekly basis. The other day someone told me that many "brokers" don't like me. That I'm too abrasive, that I'm too direct. Well that may be true. But I ask you: what would you do when your livelihood is at stake and you've lost nearly a YEARS worth of income due to the lies, fraud and misrepresentations of others. Ethics is severely lacking in this industry and I am willing to be "the bad guy" if that means I can help curb (or get rid of) the liars, cheaters, scammers and fraudsters that we are all tired of dealing with.

I am confident the real players will welcome my stance, my “aggressive” due diligence, and continue to work with me. And those that protest, get upset, or otherwise deride me for this post, well those are the ones we ALL NEED TO STAY AWAY FROM ANYWAY.