Fannie Mae Looking For Honest Brokers/Agents (Fraud Review Read Below)


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Fannie Mae REO Agents: Failure to Submit All Offers (FRAUD REVIEW)

Scenario      Mark, a listing agent for a Fannie Mae REO property, received an offer to purchase the property for a price of $166,500. However, Mark communicated to Fannie Mae that the highest offer to purchase the property was $136,500 by Property Asset Management, LLC, an entity that Mark controlled. He did not reveal his affiliation with the LLC nor indicate that any higher offers were received. Consequently, the REO property was sold to Property Asset Management, LLC for the lower price. Shortly after, Property Asset Management, LLC sold the property for $166,500 to the original bidder.

Analysis      This sequence of events represents a type of REO fraud categorized as “Flipping.” Participation in flipping of Fannie Mae REO properties involving misrepresentations, including omission, of material facts is strictly prohibited.  Fannie Mae expects brokers to obtain the best possible offer on each property. Brokers are required to submit ALL complete offers to Fannie Mae within one day of receipt. Additionally, the Fannie Mae Master Listing Agreement expressly prohibits any entities or individuals affiliated with a broker or any broker personnel from purchasing a property that is listed with the broker without Fannie Mae’s express, prior, written consent.

 

Resolution      Fannie Mae does not tolerate brokers or their agents participating in any sort of fraudulent behavior. Internal teams are dedicated to monitoring and investigating reports or evidence of suspicious activity. In the event such as this case, it is uncovered that a Fannie Mae broker is a party to any such prohibited conduct, the broker will not only be recommended for termination but the case will be reported to federal agencies responsible for investigating and prosecuting such cases. Fannie Mae has also begun implementing the HomePath® Online Offers program in various markets across the country. This program assists in preventing this type of REO fraud by creating more transparency for, and simplifying, the offer submission process.

Report Fraud to Fannie Mae Suspected REO fraud must be reported to Fannie Mae immediately. It is your responsibility as a broker or agent of Fannie Mae to report suspected REO fraud. Following are two avenues for reporting:

  1. Phone Fannie Mae at 1-800-7FANNIE (1-800-732-6643)
  2. Report the information via e-mail: mortgagefraud_tips@fanniemae.com

More on this topic [more]

If you are interested in applying to become a Fannie Mae REO vendorvisit our REO Applicationspage for a short cut to the Fannie Mae application. 

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40 comments for “Fannie Mae Looking For Honest Brokers/Agents (Fraud Review Read Below)

  1. Ha ha
    April 9, 2014 at 12:11 am

    According to alladayllc.com, HUD has a twice convicted serial rapist working as a contractor for them. His name is Aaron Aveiro.

  2. Anna
    September 27, 2012 at 2:11 pm

    So, as someone stated, now all bids are submitted through the listing agent. How does that keep fraud from occurring? As a buyer, we don’t have privy to what is bid. How do we know our bid is placed? Our agent told us that they didn’t accept the bid and they gave a specific number that they would accept on the house. How is that possible?

  3. baida
    April 26, 2012 at 10:12 pm

    How about this one.

    I but an offer on a Fannie mae Reo on 4/17/2012 witch was the firest day in the 15 day owner accupant my offer was more than the asking price ,called the salling agent on 4/20/2012 they claim that they didnt recive our offer and asked us to fax or e maill it to them claiming that fannie mae system was down.and they told us that we are compeating aginest cash offer when we asked if we can adjust ower offer and we willing to go higher they advice us not to do so and wait for a responce from the asset manager,on 4/22/22012 we have been informed that my offer is declined and they accepted a cash offer claiming that the property need work and our financing want go throw .at this point i called Fanie mae and next day a level 2 rep his name is Mark Id #A350A called me and sied they dont have any offer sumited by my agent i told hem i have the confermation page from home path and i can send it to hem as proof he said thier is nothing can be done at this point i feel i have i have been done wrong i realy wanted to buy this property it was the perfect one for me and my family .i feel my offer wasnt presanted to Fannie Mae so some one els be able to buy this proparty at a very cheep price .

  4. February 20, 2012 at 12:06 am

    Great information!

    Posted by Lisa Bills

  5. Aaron Aveiro
    February 18, 2012 at 2:26 pm

    If the the president of the bank and the bank owning the property are one in the same then there is a conflict of interest and this could fall under the frauds that are being currently investigated. If this has happened to you or a client then you really should consult an attorney experienced in real estate amtters.

  6. Diane Kelly
    February 18, 2012 at 9:06 am

    Unfortunately, this is only one example of the fraudulent practices taking place on a daily basis in the current real estate market. Unethical agents do not present all offers to the sellers. Whether the property is owned by Fannie, Freddie , Chase or any other seller, agents have a fiduciary responsibility to act in their seller’s best interests at all times! That means obtaining the best possible price and terms for every property that they have been given the responsibility to market. That does NOT mean waiting until they get their own buyer to purchase the property so they can double end it! That does not mean accepting your “friends” lower priced offer because you are real estate buddies. That does not mean purchasing it for themselves below market value so they can turn a profit. Real estate should be for professionals who have ethics, morals, knowledge, and the desire to hold themselves to a higher standard.

  7. February 17, 2012 at 7:02 pm

    Is it okay for the president of a bank to compete with the buyer and purchase a property that is owned by the bank under a llc it was not disclosed. I did my rearch found out the president of the bank is the purchaser. I need to know. This happend to my client and I researched the property to realized it was the president of the bank purchase the property it was a foreclosure property owned by the bank is this legal.

    Posted by Jennifer Ruspini

    • Diane Kelly
      February 18, 2012 at 9:15 am

      I am sure it’s illegal but good luck trying to get someone to act on it!

  8. February 14, 2012 at 9:10 am

    Already applied just waiting for the call to get going, I have tons of REO and BPO experience. Just need the opportunity.

  9. February 7, 2012 at 7:40 am

    Fraud has/will continue to exsist in every business/private sector from the local newspaper boy to the U.S. Federal Government.
    The best we can do is not be apart of it, report it when we suspect/see it and hope the checks & balances are in place to punish those who are driven by greed and personal gain.

  10. February 6, 2012 at 6:54 pm

    How about this one. An agent told me yesterday how ticked he was. A Fannie Mae direct broker gave him a bad lock box code because he had “too much on his plate to remember”. As a result this selling agent’s buyer had to pay a double fee for the appraiser, totally the list agent’s fault. List agent told him buyer had to pay it or he wouldn’t close, and he didn’t care, because he had so much business that he could easily find a new buyer.

    This should not be tolerated. I do tend to go to the wounded victim. I know the selling agent and he is honest and fair. He thinks he has no recourse, but doesn’t he somewhere?

  11. February 6, 2012 at 1:03 pm

    I realize this is off the topic…However, I can not resist the urge for some shameless self promotion!
    We are highly experienced PP company with HUD/FHA and FNMA properties.
    We are consistently in the top 20 vendors nationwide for HUD.
    Should ther be any Agents looking for the highest quality service for preservation work please consider our company.

    Sorry for going off topic….
    Thanks in advance for not getting upset!!!!

    Posted by Aaron Aveiro

    • Chris
      April 16, 2013 at 3:26 pm

      Aaron, you are spamming! Plain and simple.

  12. Melissa Murphy-Hainault
    February 6, 2012 at 1:02 pm

    @ Ranjit, Fannie just started this process 2/2/12. If they responded with highest and best it normally means they have multiple offers. They should give everyone a deadline to increase the offer. Most brokers for FNMA are very honest and fair. They do not want to loose a good client like FNMA over one transaction. They also have secret shoppers, etc. Good luck with your H&B!!

    Posted by Melissa Murphy-Hainault

  13. Ranjit Sandhu
    February 6, 2012 at 1:00 pm

    Ranjit Sandhu • I submit an offer online recently and the listing agent responded for highest and best. Does it mean even you submit offers on homepath.com does it still goes to listing agents? The bad seeds will always be there no matter what.

  14. Susan Kiene
    February 6, 2012 at 12:57 pm

    Face it guys, we are not in a perfect world. No it is not right. Yes it happens. Not with just Fannie or Freddie REOs but for a lot of REOs and even regular ordinary transactions as far as things being done right. My question is, are you personally doing something about it? When you know something is happening in your location do you discuss it with your broker, with your local board and on up the chain. If you are not part of the solution, you are part of the problem. As Realtors, we need to police ourselves.
    Posted by Susan Kiene
    Licensed Realtor in Michigan and Ohio at Real Estate 4 U

  15. February 5, 2012 at 10:35 am

    guess there are bad seeds everywhere….

    Posted by Aaron Aveiro

  16. February 5, 2012 at 10:32 am

    Now all offers are submitted by the BUYERS agent on Homepath so this will not happen again! Thanks for sharing!

    Posted by Melissa Murphy-Hainault

  17. February 4, 2012 at 12:22 pm

    Great Poncie,, Thanks for sharing. these scams are everywhere. Hope all the deceivers
    get caught. Just tell the truth!!!

    Posted by Mark McCombs

  18. January 27, 2012 at 12:36 pm

    Very good article. Thanks for sharing.

  19. January 10, 2012 at 8:18 am

    Great article, FNMA should consider using the bidding system HUD is using. It is simple and esier.

  20. January 8, 2012 at 1:37 pm

    It about time the honest ones are being push a side, you know the rest of the story.

  21. January 7, 2012 at 6:42 pm

    I’m currently marketing FNMA REO’s through a bank ANM. The brokerage is registered a eFannie but we are not direct. How can we bridge this gap? The bank we are working with is losing the FNMA servicing contract this month and we would like to continue getting FNMA REO assignments here in Michigan. Any feedback would be helpful.

  22. January 7, 2012 at 6:39 pm

    The online bidding model is one that HUD has used for years. Fannie Mae seems to be behind the times on this procedure.

    One question. Didn’t the higher bidder ($166,500)in your case study ask about the lower bidder’s ($136,500) offer being accepted?

    I know with my investors the frist thing they want to know is who and how much when they find that a property in which they had interest got away from them.

  23. January 7, 2012 at 3:31 pm

    Poncie, Great article! Thanks for the insight.

  24. Denny McCloskey
    January 7, 2012 at 2:43 pm

    This also makes it difficult for Loss Mitigation to figure out market reality when this manipulation continues. They are totally dependent on Broker info from their desks.

  25. Steele V. Propp
    January 7, 2012 at 2:42 pm

    While what was done here was fraud, one area that Fannie Mae and Freddie Mac have repeatedly misstated is the definition of flipping. The way that they describe it, it is always illegal and always fraud. And that is totally incorrect. And they have been corrected numerous times by legal experts.

    Flipping in and of itself is not illegal. There is both legal and illegal flipping. Most people involved in resales do the former. It is only a tiny percentage that do things like this agent.

    Glad he got caught.

  26. January 7, 2012 at 2:40 pm

    Just a short note. Use internet explorer when signing up, there system does not like Google chrome. Thanks Poncie I did sign up

  27. betty steinbacher
    January 7, 2012 at 2:35 pm

    Perhaps Fannie Mae should be checking their property preservation and maintenance people . I see such a wasting of assets here in rural Pa. The management companies often send vendors from the big cities to our little rural towns, a distance of 100 to 150 miles one way. It would be prudent to permit the Brokers to use local contractors who don’t have to add mileage and time to their bills.

    • April 2, 2015 at 7:43 am

      I totally agree that they should be more scrupulous in use of contractors on many levels. I constantly see significantly overinflated prices for repairs on approved bids, single bid only for renovations in thousands of dollars while they require us to get multiple bids for any property preservation tasks beyond $500….I saw one contractor pull off an unnecessary $10,000 mold remediation job for simple condensation stains on a bathroom ceiling without a mold test…. the waste is ridiculous.

  28. January 7, 2012 at 2:33 pm

    That was a great article Poncie, thank you for sharing. Those kind of agents shouldn’t be allowed in any real estate not just REO’s. I feel any agent that is lucky enough to be partnered with Freddie or Fannie has a responsibility to be honest as with all our buyers and sellers. Some agents need to know about fiduary duties.

  29. Sherre Salcido
    January 7, 2012 at 7:21 am

    This is a great article, But the question is are they really looking or only want the publicity.

  30. Rosie Garcia
    January 6, 2012 at 10:34 pm

    Thank you Poncie, for this great email. I once represented a buyer and we were a victim of this Fraud. Best Regards, Rosie

  31. January 6, 2012 at 9:41 pm

    Hi Poncie,
    Want to say thanks for doing such a good job and looking out to our future.
    Can you plz guid me how to find out that fennie may got my application, I applied about one month ago.
    I changed my email, next time please send me on this email address, Thanks.
    New email is: khalednali@gamil.com

    • Traci
      March 1, 2012 at 3:39 pm

      Just a quick question when you filled out the application what does it mean for market coverage percentage? Does it mean how much I sell in my market area and then to list 4 other commpetors? SOrry was a bit confused by this question on the application.

      • March 1, 2012 at 3:41 pm

        Hi, which application are you referring to?

  32. Fred Oshtory
    January 6, 2012 at 8:21 pm

    Hi Poncie, Thanks for keeping me in mind & sending me your e-mails.
    I truly appreciate it. Hope all is well with you. Wish you a Happy New Year.

    Sincerely, Fred Oshtory

  33. January 6, 2012 at 7:34 pm

    wow, great article. Maybe some more of those type of agents will get caught so they can hurry up and get to my application…..

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