California Real Estate Fraud Report

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Short Sales, REOs Major Cause of Legal Disputes

A survey taken by the National Association of Realtors (NAR) and published in reveals that short sales are at the top of the list for legal issues. REO sales are also the cause of the same.

The report, called Legal Scan: Legal Issues Facing Real-Estate Professionals, blames many of the problems for inadequate training of real estate agents in both short sale transactions and REO transactions.

My note: Although there is no shortage of free or low-cost training for both, these transactions are inherently more complicated than conventional (equity) sales. As readers of this blog know, complexity = more opportunities not only for confusion and honest mistakes, but also fraud for those inclined to create and take advantage of others (short sale fraud, REO fraud).

The other common causes of disputes in real estate transactions are agency issues, disclosures issues (usually failure to disclose) and RESPA (the federal Real Estate Settlement Practices Act) violations. In a normal market, non-distressed real estate market, these are the usual causes of lawsuits and administrative complaints filed against real estate agents.

By the way, I could not find a copy of the NAR report, either on its website or by linking from other websites reporting on it.

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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