Please welcome our newest author, Fred Glick, mortgage broker and Realtor who works on both coasts (and carries two cell phones to prove it!), but most notably is a CNBC pundit who has gone head to head with industry heavyweights and held his own! In talking with Fred, I learned that he is very passionate about agents being as educated as possible in all facets of the industry and never candy coats the reality of the practice of home buying and selling.
It’s amazing how real estate agents still think that you can just tell their buyers to tell the mortgage guy that they are going to live in the property when they are not. Take fake agent Larry Blinkman. Larry, who buys his shark-skin suits right off the rack at Slimes-R-Us, is (or thinks he is) a master of the art of getting a deal through.
So what their client rents now a $5000 a month high-rise condo. Larry knows how to get him into the $80,000 row house. “Dude, just tell the mortgage guy that your ex-girlfriend now lives in the building and you have to get out because she is a freaking psycho (sorry, ladies). Then say that you think Crapville is an up and coming neighborhood and you want to be a pioneer by living there.”
He continues to tell his client, “And you’ll only need 3.5% down because you can get an (Federally insured) FHA loan and we’ll get the Seller to pay closing costs and gift you the down payment through the Neverminda Group where we play a little bit with the price..”
Little did he know…
Unbeknownst to Larry, this is the calendar year 2009 and the year that the Genghis Kahn’s accountants took over auditing of mortgage loans. Let’s point out Larry’s lack of understanding (I am not calling it fraud just yet because it has not happened. It might just be a conspiracy to commit fraud, but I forgot to stay at a Horiday Inn last night so I can’t play lawyer) of the structure.
First, If you are not going to occupy the property then don’t ask for an owner occupied loan. WHEN, not if they catch you, you have committed a FEDERAL crime and could possibly be hanging with Bernie Madoff for the next 149 years, 7 months, 24 days, 6 hours and 13.45 minutes.
Second, The jack-the-price-up-and-we-will-have-the-not-for-profit-give-you-a-down-payment-grant stuff is gone. All they were doing is jacking the sale price and taking a commission for washing dollar bills (Scarface reference).
Training & management of legacy real estate offices is AWFUL
The bottom line is that the training, mentoring and management of the legacy real estate offices is awful, that’s the major reason why fraud happens. Brokers need to do a bit more surgery on their agent’s deals. Question the mortgage person intently to make sure they are not conspiring with your agent and/or the buyer to put your license, reputation and freedom in jeopardy (not to mention your E and O insurance!).
The real estate industry has a sleazy reputation and this is a perfect representation of it. How about every agent (and mortgage and title person) who wants to keep their license go to a mandatory Fraud Prevention class live that is put on by the FBI. Or how about NAR requiring it?
Enough of the floats and motivational speakers…
Instead of spending big bucks on entertainment and motivation at a 70’s like convention that can have everything offered via something called the internet, spend the money on fraud prevention. Clean up your own house and get rid of the losers.
If NAR won’t do it, pressure your state to offer it as a required Continuing Ed class instead of a fung shei class (I swear, in Pennsylvania it exists!). I know there are people desperate for deals and will try to bend things to get it done but in the end, you will get caught.
But when you quit real estate, Larry, don’t telemarket me with guaranteed leads and tell me that you know the business and know what works for me. Don’t get me started on telemarketers!!