Short Sale Fraud

In the recent article posted by Karl Denninger entitled New Short Sale Fraud Allegations: Second Liens, The subject of fraud with short sale subordinate lien holders is discussed. Unfortunately since second lien holders frequently, get 10% or less, they often request funds off the HUD to be brought in by real estate agents or the buyers so the first lien holder doesn’t see it. Many times the first lien holder is actually aware of these arrangements, but as long as their minimum net is satisfied they will turn their heads to this type of practice thereby indirectly endorsing it. This is a prevalent problem and only becoming more pervasive. This practice must be exposed to be stopped, shout it from the roof tops and let these lenders know we will not continue to tolerate it.