Saturday, January 16, 2010

Not Alone: Many Face Issue of Second Liens -- Even Alleged Fraud!

Sometimes I think I'm crazy, betting sucked into this short sale deal, putting so much time into it, letting it become an obsession, and experiencing outrage at what's going on here on the fringes of the subprime meltdown.

But tonight I read that this situation with lien holders putting the squeeze on short sale buyers is pervasive -- potentially turning into yet another banking scandal. It might sound esoteric, but this may be happening in thousands and thousands of desperate deals being struck around the country.

According to Diana Olick, writing on the CNBC site (here), there are allegations that major banks, when they are holding second liens, are pressuring short sale buyers into making illicit payments that won't show up on the official HUD-1 closing document. And apparently this is illegal.

The alleged malefactors include CitiMortgage, JP Morgan and Bank of America.

I'm not surprised.

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