Bad apples??? You can’t see the worms for the trees!

You can search every blog and forum on the internet and read of indignation regarding what has happened to our market. Depending on the site, fingers will be pointed at someone else. Well here is a snapshot for you.

The names of the people involved have not been changed. They are all a matter of public record. The story line has been provided by the individual involved. It gives a good overview of why lenders and agents have been smeared with the events that occured over the last few years.

I was called by Justina Hernandez. She wanted me to come see if I could help her sell her condo before it was foreclosed. Ms. Hernandez was at home, with her two sons when I went to sit with her.

She pulled out her documents from when she purchased the condo. I reviewed the contents. She purchased the condo in March of 2006. She was represented by Edda Salas-Garay. Edda is the broker for EMEC Housing Solutions Inc. now located at 101 Windy Knoll Drive, Rockville, MD.

I asked Ms. Hernandez some basic questions. She told me that she was a maid at the Marriott and made about $15 per hour. I asked her why the loan application indicated that she owned a carpet cleaning company and earned $5950 per month.

She stated (the following may be considered hearsay) “I just signed the papers my agent told me to sign. I knew that it was not true, but he said don’t worry.”

She got the house.

In October, Alejandro Salas, working for the same company, helped Ms. Hernandez buy a home for her mother. The home was indicated as her primary residence again. She had not sold or rented the first home. This home was financed through another firm with the assistance of her helpful agent.

She can’t pay for either of them. She is now unemployed. It seems that the first home may have already been foreclosed on. Her second home is heading the same way.

She understands that it was wrong and against the law to sign a loan application that was misleading to the lender. She knows she was wrong.

She also believes that she did what her agent told her to do.

I kept reviewing the documents. The stench of what had happened was a bit over powering. I told her that she may lose both homes, but she should file complaints against the folks involved.

You can not have two principal residences. The agents involved handled both transactions. It appears they are husband and wife. The bought the home where their offices are located for a little over $1,000,000 between the timing of these two transactions.

I thought the entire scenario sounded awry and called the Maryland States Attorney to see how she could proceed. She speaks limited english. I was told that she should email or fax or mail a formal complaint to their office and at some point an investigator would review the complaint to determine if further investigation was warranted. I asked if there was not someone that could speak with her and assist her in this effort. I was told no.

Ok. I called a few reporters at the Washington Post to see if they might be interested in doing a story on this and creating some pressure that might bring about an investigation. They haven’t called back.

I called the Maryland Real Estate Commission and explained what may have occured and they said that she would have to go on line and download a complaint form and submit it to them. It would be forwarded to an investigator and they would determine if it merited further review.

It has become apparent to me, that people in our industry can do damn near what ever they choose without fear of repercussion. It is not easy to get someone in authority to listen. I am beginning to understand why date rape is not reported very much. It must be difficult to beg the authorities to listen to you.

So I shall continue to seek justice for this woman and find a way to make sure that all involved are held accountable for their behaviour.

The tally as I can see it on the HUD-1’s is EMEC made about $13,000. Ms. Hernandez will end up with nothing. All of the loans have been sold to GMAC. I guess that takes Freemont and Pinnacle off the hook. GMAC probably packaged the loans and sold them on Wall Street.

Neither property will fetch what it sold for. The Hernandez family will most likely have to find relatives to take them in.

I am just “pissed off”. And you wonder why folks look at us like we are children of the devil.

I know she was party to the deceit. A judge or jury will have to determine if she was led down that road. Regardless, her guilt does not excuse what seems to be a case of real estate agent using their implied position to make money and I have to wonder about the relationship between the agent and the lenders. Are we to believe that no one checks out information?

Is it just me or does this story reek of malpractice on many levels.

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