Does this sound like fraud? Or just shady business? (agents, mortgage, mortgage)

[Jmg90300zx]

Originally Posted by faabala

Did you write the checks to your real estate agent or the mortgage broker or were the one in the same?

My agent was also a broker who was working with another broker and then the lender if I understand it correctly. Basically my agent showed me the houses and then worked with someone at a broker company. The two of them worked together with the lender.

Not sure if this helps.

[Squirl]

If it was a flip property and the owners (the re investors) owned it less than 90 days before the closing date then I do believe 2 appraisals is not unusual for FHA approval. At least that was required when I sold my investment property to FHA buyer and it was w/i the 90 window. As the seller, I paid for an appraisal.

[Jmg90300zx]

Originally Posted by manderly6

This absolutely baffles me:

"my agent owed the money to the lender"

Why is your real estate agent involved monetarily with your lender?

I don't have a clue. He explained to me that since the rate hadn't yet been locked at 5.375% that the rates had now gone up to 5.5% and my DTI was too high with a 5.5% to qualify for the loan. But since the original paperwork showed no higher than 5.375% that we would have to pay the lender to reduce it from 5.5% to 5.375%. He explained that it couldn't be paid with escrow since the original paperwork showed 5.375%. As a result he would pay $1900 to the lender and I would reimburse him the $1900 under the table. It sounded fishy to me but I wasn't sure and was afraid to lose the deal and was scared that I would lose my upfront $5k deposit.

[Squirl]

If this was the agent and not the broker I would contact the broker and ask for clarification and reimbursement for expenses that are not "kosher"

[Jmg90300zx]

Originally Posted by Squirl

If this was the agent and not the broker I would contact the broker and ask for clarification and reimbursement for expenses that are not "kosher"

So to clarify. I'm not sure. Can there be two brokers in a sale?

In this case the guy that I was working with was a referral to me and he was the one that went to show me the houses. (I assume he is the agent) but he also has a business card that shows Mortgage Broker.

He was working with someone in the middle which appeared to be a receptionist or something like that for a broker company.

Then there was the lender and the escrow company. These are the four parties that I remember dealing with other than the listing agent.

I do know that the person who "sold me the house" as it was listed in MLS was the same person who showed me the houses. I assume he was the agent. Could he be the agent and a broker and also be working with a second broker?

[MMichelle]

Run, do not walk to your state's real estate commission!

[Silverfall]

Oh man...

Okay here are some rules...first one is the 90 day FHA flip rule which required that if an investor flips a property within 90 days of purchase that FHA requires two appraisals to determine value. So the two appraisals is totally normal.

Second rules apply to the new HUD guidelines that went into effect Jan 1 regarding making changes to loans. They have something called tolerances now which indicates how close mortgage brokers have to be on their good faith estimates. These tolerances are important because if they are exceeded the mortgage brokers will eat those costs for not being accurate in their original estimates. I am concerned that your mortgage broker blew it on the original good faith estimate and was trying to have you make up their mistakes "under the table." If there is a substantial change to the loan like an interest rate jump, then the loan gets delayed as the waiting rules apply.

So in the transaction there is typically the buyer's agent, the seller's agent, the mortgage broker, and the lender. It sounds like your agent as the buyer agent was also the listing agent? This means they represented you and the seller at the same time. I'm not sure about that, since you aren't clear.

Then there is the mortgage broker. They are the ones that interface with the lender, who is the one that actually gives you the money.

You can't do anything under the table. It is illegal.

[Jmg90300zx]

Originally Posted by Silverfall

Oh man...

Okay here are some rules...first one is the 90 day FHA flip rule which required that if an investor flips a property within 90 days of purchase that FHA requires two appraisals to determine value. So the two appraisals is totally normal.

Second rules apply to the new HUD guidelines that went into effect Jan 1 regarding making changes to loans. They have something called tolerances now which indicates how close mortgage brokers have to be on their good faith estimates. These tolerances are important because if they are exceeded the mortgage brokers will eat those costs for not being accurate in their original estimates. I am concerned that your mortgage broker blew it on the original good faith estimate and was trying to have you make up their mistakes "under the table." If there is a substantial change to the loan like an interest rate jump, then the loan gets delayed as the waiting rules apply.

So in the transaction there is typically the buyer's agent, the seller's agent, the mortgage broker, and the lender. It sounds like your agent as the buyer agent was also the listing agent? This means they represented you and the seller at the same time. I'm not sure about that, since you aren't clear.

Then there is the mortgage broker. They are the ones that interface with the lender, who is the one that actually gives you the money.

You can't do anything under the table. It is illegal.

Silverfall, Thank you for your response. Maybe I can clarify a bit more.

When I received the Good Faith Estimate I was told there would be two. One which would be "about accurate" and one which would be "overstated."

The final settlement statement was lower than the overstated GFE and about the same as the "about accurate" one. But the final settlement statement did not include the $995 processing fee which my agent claims he paid to the broker, or $1900 additional charges my agent claims he paid to the lender to reduce the interest rate. I then wrote the checks to my agent to reimburse for these charges outside the close of escrow.

In this situation both my agent and the broker company was dealing with the lender. My agent also has a business card that shows him as a Morgage Broker. I believe in this case he was the buyers agent only or possibly the buyers agent and the 2nd broker??

Maybe this will help let me assign some fake names:

John - Buyers Agent working with me and the broker and the lender
Mary (West Mortgage) - Broker dealing with my agent and the lender as well as the sellers agent
Tom - Sellers Agent dealing mainly with my agent and of course the seller
Housing Financial - The lender, working with the broker and my agent
California Title - Escrow officer dealing with the broker and my agent and the sellers agent.

My concern is that my agent (John) has an office in the same building as the broker (Mary - West Mortgage) so I believe if I was ripped off they are in it together. Someone had recommended that I ask the broker for clarification. But if they are in it together then wouldn't they just try to come up with a story toghether? John has his own "Realty" company name that he uses and when I wrote the checks to reimburse John for money he claims to have paid to the Broker and lender under the table I paid it to his Realty company name.

Is it possible that both John and Mary could have both been brokers in this situation and that John was also my agent?

[Brandon Hoffman]

Originally Posted by DMenscha

NO! This has RESPA violations written all over it.

I'd file a complaint with your state agency that regulates mortgage brokers. Not only that, but the 5.5% rate seems like a ripoff too!

Even after the explanations...this is still the correct response.

[Silverfall]

Originally Posted by Brandon Hoffman

Even after the explanations...this is still the correct response.

Except that the OP also needs to file a complaint with the real estate board since he paid his real estate agent mortgage processing fees under the table.