violations - Blog - REO Pro Network

Per the Consumer Financial Protection Bureau’s own Newsroom May 28, 2014 the CFPB Takes Action Against Realty South for Mortgage Disclosure Violation and orders the firm to pay $500,000.00

Back in 2006, about a year after I got into real estate, I noticed several local Brokerages working very closely with affiliated companies like Title companies or Mortgage Lenders. Fresh out of real estate school, these business affiliations were always a point of contention with me because, it felt like a fine line RESPA violation. Granted, the company I worked for at the time had it’s own business affiliations, namely a specific Title company that was attached to almost all of their brokerage office but, we had a single page disclosure to consumers that made it clear, they didn’t have to use any affiliated business service provider and had the right to use whoever they wanted for any required service. In essence, I felt safe about using affiliated business service providers because, we made it clear, it was nothing more than a suggestion and not a requirement.

With all that being said, I do remember some brokerages (not the one I worked for) where consumers weren’t given the choice, option or disclosure that they didn’t have to use the brokerages preferred Lender or Title company. I remember walking into brokerages where big signs at the door greeting me with advertisements like, “ABC Bank Offers the Best Rates for Realty USA Clients”. Or course, I changed the names to protect their identities but, these types of ad’s were common place in some brokerages around here.

Well, back then, I don’t guess many people thought twice about the RESPA violation or potential violation because, whoever heard of any being fined or charged with a crime? Sure, we heard stories but, they were always in some far off state about some no name broker so, who really worried about that happening here?

Well, in light of recent news from the CFPB, people better start wising up quick. The CFPB is here and they are looking to make a name for themselves off the convictions and fines for violators. To be crystal clear, this is a good thing, my industry needs some serious enforcement. Truth is, the serious lack of enforcement over the years has created a industry where honest mistakes, systemic errors, gross incompetence, and in some cases, nefarious intentions are routine with some brokerages. It’s sad to say this but, it’s true. I am frustrated every day….no exaggeration….every single day by at least 2 or 3 Realtors who call me to ask me questions about my clients confidential transaction information that when I reply to them, “I am sorry but, I reserve those discussions with my clients only”….they blow up, accuse me of not knowing my job. It’s pathetic…..it really is. My point is, I am an advocate for enforcement, at least at this stage, all the enforcement we can get will be a good thing.

I challenge Brokers to read the CFPB newsroom articles. They may be surprised at just how the CFPB is going after violations. In fact, one article I read said that they fined a broker for a violation because, in their opinion, even though they did disclose, it didn’t go far enough. Brokers, you better be doing a good job at protecting yourself and ensuring your business affiliations are properly disclosed and no funny business is going on or, I may be writing a blog about your run in with the CFPB soon.

A couple of months ago I received an reo listing from an asset management company that sometimes sends me listings, not many, but hey every little bit helps. They ordered the CFK, and although I am usually succesful with cfks, in this case the homeowner did not agree to it. She was receiving advice from an attorney/friend that told her to stay in the house. After a while, as it happens, I was notified of the lock out date. The family was already gone on the lockout date, but they had destroyed the property. Among many other things, they took of all the electric outlet covers throughout the house and left the wires exposed. The house has illegal additions, code violations, an empty pool, electric issues, they broke walls, took all appliances, Central A/C, etc. Since I am very familiar with the way this particular city works, I sent in a document attached to the bpo explaining everything and advising what needed to be done before the house started showing to avoid problems with the city. Needless to say they sent my bpo back 3 times because the appraissal came in at a higher value. Of course the appraisser was not using reo comps with similar illegal additions and/or conversions. He failed to mention that probably more than half the house would have to be demolished because it was done without permits. Finally my price is approved and the property goes on the market, I go back to the property before listing it on the mls to make sure it was ready to be showed. When I get there, I find the only thing done was the trash out and they caped the exposed wires. I again write to the am and send pics, since they have their own preservation co to do everything, they've decided that was all they were going to do to sell the property as is. Ok, well I dont want to be a pain...To make a long story short, the house has been on the market for less than a week and somehow the city already heard about this beauty and went there today (without even notifying me) I don't know how they got in. They later faxed a 2 page long violation to my office listing everything they could think of and they want it fixed yesterday. Now for the plastic cover plates that I recommended to put on all the electric outlets just to make it look decent we have to hire an electrician, pull permits and pay fines!!! They are going to make my life miserable and hold up the sale for months and many of this problems could have been avoided by just doing some minor work in the house, not only to avoid problems with the city, but also for safety issues. Now even the mosquitoes in the neighborhood are coming from inside this house. LOL. I could only laugh when I saw what they were hitting us with. I love my job, I work very long hours, try to stay optimistic in all situations and will go the extra mile to get issues resolved and close the deal. This one will close, I know that, but Im going to have to move into the city office until everything is done the way they want it and they take pity on me or get tired of having me around. Oh... and drain my pockets while I wait for reimbursement.

violations (2)

RESPA Violations Top Priority at CFPB

How do I say I told you so to an Asset Manager?

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