The FBI - Short Sales, Brokers, Banks, & Fraud!

Feb 25, 2014

By: Doreen Spagnuolo, Staff Counsel

The Federal Bureau of Investigations (FBI) is looking closely at short sale transactions to determine whether or not a fraud was committed against a lender.

The FBI is focusing its attention on real estate brokers to see whether or not the broker submitted all offers to the lender in a short sale transaction. A real estate broker who does not submit ALL offers to the lender could be charged with being involved in a conspiracy to commit fraud against the lender. Even when contracts are submitted to the lender, but not yet approved by the lender, the real estate broker must continue to submit all offers to the bank.

To protect yourself, it is recommended that you document by certified letter that you have given the lender all the offers that you received on the property.

In the instances where the lender’s website does not accept subsequent offers after the contracts have been submitted, your certified letter should contain the following language: “We have received a subsequent offer. Your website is not receiving additional offers. We feel duty-bound to communicate the enclosed offer to you for whatever use you deem appropriate”.

The main goal for the broker is to create a paper trail so that the broker is not charged with a breach of the fiduciary duty of full disclosure.