Update to Predatory Practices: The property in question that brought this Nationstar vs. Auction.com issue to light, has now closed! We were able to successfully remove the Auction Task and complete the Close of Escrow last week without participating in their mandatory process described, below. This was done by the cooperation of the Platinum Elite Group Team and Negotiation Service Providers as well as all of those that are involved in any transaction that is distressed. Thank you to everyone that participated, responded, and commented on this article. It is the collaboration and activism that empowers us to push through the complexities thrown at us through the Lending servicers and the sometimes unrealistic guidelines set in place by the investors.
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For those of you that missed the original article here you go;
Predatory Practices still in full swing against Homeowners by Nationstar Mortgage Holdings, Inc. (NSM) through the assistance of Auction.com. Bloomberg Business Week has reported in this linked article, “Nationstar Sued for Selling Loans Rather Than Servicing“. Read the whole article and realize what is not pointed out is “Homeowners” that are in default, are not mentioned. However, just in the past few days, through the negotiating company Negotiation Service Providers, LLC, Homeowners who are in default and actively participating in Short Sale Negotiations and under contract with all terms and conditions agreed upon, are being instructed to sign a “Nationstar Mortgage’s Short Sale Terms and Conditions” Agreement. In this document are 12 Twelve Terms and Conditions, the most alarming are, as stated herein;
Term No. 4: Nationstar Mortgage reserves the right to market your property and to obtain additional offers during the period the offer you have presented is being reviewed. Nationstar Mortgage may retain Auction.com to market your property to obtain these offers.
Can you say, Contractual Interference? This is going to get ugly before a resolution is evident, this is why we have an attorney assist program.
Term No. 5: You and your real estate agent agree to cooperate with Auction.com during the auction process by, including, but not limited to, making your property available for at least one (1) open house date prior to the auction date and directing any interested parties to submit offers through the auction process. Etc…….
How do you think the homeowners can place their home back on the market when they already have an Offer and Acceptance (which is a complete full and binding contract), with agreed terms and conditions, and who also has complied with a counter offer from Nationstar. Now all parties are under a binding contract. Through proper contract negotiations, you should be able to count on all parties to use fair business practices. This is illegal from a Nevada Real Estate Practices perspective.
Term No. 7: If Nationstar is able to obtain a higher offer than the currently submitted offer, Nationstar reserves the right to evaluate the new offer instead.
Again, as mentioned above, this is interference with a current and active Real Estate Contract in place between the seller and purchaser. Nationstar and Auction.com are acting as if they already own the property and can dictate the disposition of the negotiations through placing it on Auction for four (4) days. Would someone tell them that they don’t have that right or privilege until they properly foreclose on the property. Oh, that’s right, that’s the other part of this story that has been left out. Nationstar has told us, through their negotiator that they have a Trustee Sale Date through CalWestern Trustee Corporation for March 18th, 2013. According to our affiliate company NSP, LLC, the title company, public records, and Attorney Crystal Eller who conducted her own review, there has been no Notice of Default filed. In addition, a Certificate for Foreclosure has not been issued as is required in the State of Nevada under the Nevada Foreclosure Mediation Program. This is covered under the Nevada Statutes since the passage of AB 149 in 2009. This is Predatory and illegal on multiple levels.
Term No. 8: In connection with the auction marketing services provided by Auction.com, a buyer’s premium in an amount not to exceed 5% percent of the winning bid amount shall be added to the winning bid amount to establish a “Total Purchase Price” to any buyer obtained by Auction.com. The Buyer’s Premium will not apply if the originally submitted offer is the highest bid; however, if the original offer is driven higher by bidding activity, the buyer’s premium will apply to all bidders, including the original buyer. The buyer premium shall be paid to Auction.com at closing……..
What is touched on in the Bloomberg Article written by David McLaughlin & Jody Shenn, is that Investor’s are appalled that this “Buyer’s Premium” is being shared with Nationstar?! Is this not a breach of their fiduciary duty to their investors as well to the homeowners involved?
Term No. 12: Nationstar Mortgage will evaluate your current offer or the higher offer and make a firm decision on their acceptability.
It was very well said on by other Short Sale Professionals regarding this issue, quote; “Servicers and Investors are handling Short Sales as they do their REO’s. The obvious issue is that they are not the owner of the property as they are with an REO. Basically, they are trying to control the listing agreements, list price, marketing, and contracts.”
Understand that Auction.com’s bidding platform, eliminates the Appraisal Process, which detrimentally affects the ability to Short Sale at all, because properties with Freddie Mac, Fannie Mae, and FHA financing will not even meet threshold investor guidelines.
The most frustrating result of this circumstance is that Nationstar is stating in its E-mail to the Homeowners through Negotiation Service Providers, LLC is that in order to continue with The Short Sale Process the document must be signed by the Homeowner and Listing Agent then returned by a specified date or face foreclosure. Quote, “This Program is not Optional.” Again, Predatory and unfair collection practices are being used by Nationstar.
Crystal Eller, who has also been retained by the borrower, plans to contact Nationstar and Auction.com to demand that they cease and desist these Predatorial and unlawful practices against our mutual client and homeowners in the state of Nevada.
If you are experiencing the same difficulties as described in the Bloomberg Business Week Article, this Platinum Elite Blog Page, or with Nationstar, or other Mortgage Servicing entities, please contact our offices and let us see what options are available to you in your situation.
Thank you, Donald Lainer Team Leader for Platinum Elite Group
- Nationstar Sued for Selling Loans Rather Than Servicing (bloomberg.com)
- Nationstar Seeks Bids for Bundled Mortgages, Credit Suisse Says (bloomberg.com)
- HAFA and the Negotiator, A Short Sale Tale (platinumelite.wordpress.com)
- Homeowners associations find short sales an option to recoup losses (sacbee.com)
- Brown: Speed up ‘short sales’ (toledoblade.com)
- Nationstar Ordered to Stop Auctioning Some Loans (bloomberg.com)
- Short sale agents: how to postpone a foreclosure date (agbeat.com)