Mesa, Arizona - The Buy and Bail Scheme Is Still Alive And Well!!!

By
Real Estate Broker/Owner with Teri Ellis at Homes Arizona Real Estate LLC

Recently I received a telephone call from a Realtor from another state. He introduced himself, told me he had found me through Active Rain, and knew so and so, and so and so - yada, yada......

After we had finishFor Saleed with our introductions, he told me he had a client that had a home in Mesa, Arizona, and they wanted to find someone to list it for them.  As I began to question him on the circumstances of the sale, he said that the sellers just “needed” it listed. I prodded him further asking if they had taken out a second and if they were upside down. He said, "yes," and basically needed it listed in order to complete their purchase of a home through him.

He further went on to tell me that they didn’t really care whether they sold it or not, and heFraud didn’t need a referral fee. Sound fishy? Yep, to me it did – and it was.

I told him this: “they are buying another home and bailing on this one,” aren't they? He hemmed and hawed, and pretty much acknowledged this to be true - actually he "thought" it "might" be the case, but “he didn’t know for sure.” 

I told him that it is mortgage fraud  knowing when you purchase one home that you are walking away from the other one!! You see, I have very strong feelings about this type of mind set. (See my previous post written in June 2008 on the Buy and Bail phenomena.)  NO WONDER we are in such dire straits in America!! Guess who picks up the tab? US!!! People don’t think twice about their obligations to keep their promises – AND – this agent had never heard of the Buy and Bail scheme. Maybe yes, maybe no!! Hopefully all Realtors are aware of this egregious behavior and DO not assist buyers/sellers with transactions of this type.

 

Mesa, Arizona Real Estate. Call me at: 480.216-3334 for information on purchasing or selling a home in Mesa, Arizona or surrounding towns. OR email me: Teri@TeriEllis.com. Feel free to visit one of my websites: HomesAzRE.com, ServingMesaArizona, MoveToMesaAz.com or MoveToSunnyAz.com. Or stop by my blogs at: MesaAzRealEstateVoice; or Phoenix Valley Real Estate Blog

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Re-Blogged 6 times:

Re-Blogged By Re-Blogged At
  1. Liane Jamason 08/05/2009 08:11 AM
  2. Dana Devine 08/05/2009 08:39 AM
  3. Phil Romanow 08/05/2009 09:37 AM
  4. Edie Cooper 08/05/2009 09:40 AM
  5. Chuck Marunde 08/05/2009 10:13 AM
  6. Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers 08/15/2009 06:20 AM
Topic:
Real Estate General Information
Location:
Arizona Maricopa County Mesa
Groups:
Arizona Homes
Diary of a Realtor
Phoenix Arizona Real Estate
Posts to Localism
REALTOR LIFE
Tags:
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arizona
buy and bail
teri ellis
buyers
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arizona real estate
homes arizona

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Show All Comments
Rainmaker
16,348
Janice Cooper
Long & Foster Real Estate Inc. ~ C: 609-694-3622 New Jersey - Medford Township, NJ
Broker Associate, ABR, ASP

Very good discussion!  We need to be very aware of every new scam that comes down the pike. ~JC

 

 

Aug 13, 2009 03:19 AM #122
Rainmaker
412,298
Mesa, Arizona Real Estate Mesa Arizona Realtor
Teri Ellis at Homes Arizona Real Estate LLC - Mesa, AZ

Elizabeth, thanks!!! I like to change things around now and again. ;-)

Janice, I thought so too.....lots of great ideas.

Aug 13, 2009 03:23 PM #123
Rainmaker
197,630
Mark Velasco
Realty Source, Inc (Luxury Homes Division) - Whittier, CA
Friendly Hills Homes for Sale - Whittier, Ca. Real Estate - Listings

I couldn't agree more with you Teri. It is not worth one commission and my LICENCE to do such unethical behavior.

Aug 18, 2009 12:35 AM #124
Rainmaker
412,298
Mesa, Arizona Real Estate Mesa Arizona Realtor
Teri Ellis at Homes Arizona Real Estate LLC - Mesa, AZ

Mark, you're right. Any doubt - forget about it. ;-) Thanks for dropping by. ;-)

Aug 18, 2009 01:44 PM #125
Rainer
31,554
Eric Murrietta
Homeowners Financial Group USA, LLC - Scottsdale, AZ

I am late to the party on this one but at least you did the right thing.  I still see a lot of that happening and it is tough to differentiate with what people are really planning to do at times.  But my rule of thumb is that if it seems fishy, it usually is, so get out of there.  Thanks for the reminder.

Aug 19, 2009 06:13 PM #126
Rainmaker
359,097
Sybil Campbell
Century 21 John T. Ferreira and Son Inc. 500 Centre St. Amelia Island, Fl 32034 - Fernandina Beach, FL
REALTOR ABR, SFR, SRES - Amelia Island

You are so right Teri. There are so many people in our culture who don't worry about the consequences of their actions and that is a big part of what created the financial mess we are in now!

Sep 04, 2009 01:12 PM #127
Rainmaker
985,879
Gary L. Waters, Broker Owner Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Melbourne, FL
Personal Service, always.

Buy and bail - a pretty slimy approach to business or life. BTW, I love your use of color and different fonts!

Sep 10, 2009 08:16 AM #128
Rainmaker
412,298
Mesa, Arizona Real Estate Mesa Arizona Realtor
Teri Ellis at Homes Arizona Real Estate LLC - Mesa, AZ

Gary, a very slimy approach....that appears to be more the norm these days. Thanks!!!

 

 

Sep 10, 2009 10:01 AM #129
Rainer
115,442
Kyle Jan
Scottsdale, AZ
Phoenix AZ Homes for Sale

Thank you.  I am a broker and get very frustrated when I am brought the financing side of these deals and the borrowers act like it is no big deal.  We all need to be strong enough to shut them down and walk away.  I applaude you and please continue to stand up to these individuals. 

Sep 17, 2009 11:04 AM #130
Rainmaker
412,298
Mesa, Arizona Real Estate Mesa Arizona Realtor
Teri Ellis at Homes Arizona Real Estate LLC - Mesa, AZ

Kyle, it IS a big deal....and very dishonest. Thank you for coming by! ;-)

Sep 19, 2009 03:13 PM #131
Rainmaker
90,211
Craig Chapman
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy

I have a number of people present me with similar situations that appear to be basically the same deal.  They come in several different cloaked forms so its not quite as easy to detect that amount to the same thing.  I agree, it is not worth the potential money, to be dishonest.  Apparently there are some out there who are either un eduacted & don't know, or don't care, I'm not sure which.

I have had at least a couple people who wanted to buy a new smaller nore affordable house & attempt to rent their way upside down house.  Since the potential rent would be not near enough to cover their mortgage, what do you think the next step would be?  This might not be as clear, but could still get an agent in potential trouble down the road in case that rented house defaulted.  I suggested looking into a short sale for these people, but they declined. 

 

Apr 02, 2010 02:55 PM #132
Rainmaker
87,795
Jason Whaley
WestUSA Realty Revelation - Chandler, AZ

I think banks are on to this pheniomenon. They started cracking down about 2+ years ago, but you can typically buy a 2nd home if you have the down payment and at least 6 months of PITI in reserves for both places. This is still not going to stop someone who owns a home that they owe $450k and it is worth only 300K when they can find a home that was worth 900K and now buy it for 500K. They are getting way more house for the same current moeny and they have the cash reserves to do it. I have seen it done recently and the lenders are allowing it because the buyer's profile looks pretty good. It is still a sham though, Jason

 

 

www.SearchAZmls.com

 

May 21, 2010 05:34 PM #133
Rainer
8,278
Kevin Lambe
Amerifirst Financial - Tempe, AZ

I had 3 situations this year that were buy and bail. It is surprising how enrolled the people are that this is the solution. One RE agent told me he called his attorney and the attorney said no one would ever come after him for this. I told him he was a future client for the Attorney, nothing more. It got me black balled from his RE office....Oh Well

Jan 12, 2011 12:00 PM #134
Rainer
8,383
Howard Shapiro
Homeowners Financial Group - Phoenix, AZ

Teri, Thank you for the way that this was handled. On the lending end we also have our antenna up. There are comprehensive criteria to meet when buying a new home with an existing home in place now. You would think that this would create another level of protection against these types of transactions, but buyers are apparently able to find lenders that essentially look the other way. This is part of the open door. I don't wish to be a policeman, and I certainly want to create new business, but if this profession has learned anything, it's that the integrity of the entire system starts and ends at the front lines. Thanks again.

Jan 28, 2011 10:33 AM #135
Rainer
8,383
Howard Shapiro
Homeowners Financial Group - Phoenix, AZ

Teri, Thank you for the way that this was handled. On the lending end we also have our antenna up. There are comprehensive criteria to meet when buying a new home with an existing home in place now. You would think that this would create another level of protection against these types of transactions, but buyers are apparently able to find lenders that essentially look the other way. This is part of the open door. I don't wish to be a policeman, and I certainly want to create new business, but if this profession has learned anything, it's that the integrity of the entire system starts and ends at the front lines. Thanks again.

Jan 28, 2011 10:33 AM #136
Rainer
57,889
David A. Weaver
Buckeye, AZ
20 years helping folks finance their homes.

Hi Teri,  I  just finished the first of a series of four blogs where I will detail the guidelines to enable an underwater homeowner to legally convert their current residence into a second home or an investment property.  Being here in Arizona I get those calls every day or so.  You might find it helpful to know the lenders rules to make it happen.  Here is the link: http://activerain.com/blogsview/2365494/how-to-get-out-of-your-underwater-house-and-live-to-tell-about-it-.  Check back with me next week for part dos.  I hope you find this helpful. 

Jun 24, 2011 10:10 PM #137
Rainmaker
63,934
Kimberley Rosenstein
HomeSmart - Scottsdale, AZ
Superior Service

I look foward to reading your series on guidlines Teri. 

 

Sep 26, 2011 10:54 AM #138
Ambassador
1,126,955
Mark Taylor Mortgages
and for 1st Time Buyers, Move Up Buyers & Investors - Scottsdale, AZ
602-361-0707 #MarkTaylor #Awesomerates NMLS#207897


Oct 15, 2011 10:20 PM #139
Rainer
7,845
Ann DeWolf
ADT Security - Sun City West, AZ

Teri,

 

Thank you so much for sharing this. I have been appalled at this practice ever since I first heard people were doing this. Really, just dump your responsibility for one home and walk away from your obligation and walk right into another home! I really hope Realtors will not assist people in these transactions.

 

Ann DeWolf

ADT Security

Sep 27, 2012 04:18 AM #140
Rainmaker
412,298
Mesa, Arizona Real Estate Mesa Arizona Realtor
Teri Ellis at Homes Arizona Real Estate LLC - Mesa, AZ

Ann, right on! Hard to believe isn't it? Hopefully the lenders are more savvy about this stuff than they were at the time I posted this. ;-)

 

Sep 27, 2012 11:21 AM #141
Show All Comments
Rainmaker
412,298

Mesa, Arizona Real Estate Mesa Arizona Realtor

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