EDITORIAL -- Officials in the Office of Asset Management of the U.S. Department and Housing and Urban Development appear to be asleep at the wheel. Inman News published a shocking article yesterday titled "Investor fraud grows in HUD real estate sales...More investor buyers pose as non-investors" by Glenn Roberts. The information was based primarily upon a series of articles published in TheREALTYgram Blogger.
Here is the most shocking quote gleaned from Roberts' piece:
"According to HUD statistics, there were 14 cases last year that were investigated as possible HUD Homes eligibility violations, and four sanctions issued. In 2003, there were 20 cases investigated and 13 sanctions issued, in 2002 there were 14 cases investigated and five sanctions issued, and in 2001 there were 12 cases investigated and five sanctions issued...While owner-occupant buyers are supposed to live in a property for a year after purchase, Laurie Maggiano, deputy director of the Office of Asset Management for HUD said it is a difficult rule to enforce. "We probably wouldn't even know about it," she said, if the owners resell the house within a year."
By its own admission, HUD cites a mere 27 sanctions for fraud nationally in four years! In the Lehigh Valley (PA) alone, there were more than 30 cases of investor fraud in the last year alone, according to investigative experts who have been in contact with us since TheREALTYgram Blogger broke the story in February, 2005. Those cases involve buyers of "multiple" HUD homes as well as real estate licensees. Sources close to the Lehigh Valley investigations report that complaints have been filed with HUD's asset managers for the region as well as with HUD.
None of the sanctions Maggiano references can be found in HUD's audit reports, which include disciplinary reports for all other types of HUD fraud. What are the nature of these "sanctions"? Language on the HUD Agreement of Sale warns of $250,000 fine and imprisonment for offenders. Did these sanctions include fines and/or imprisonment?
Maggiano's comments demonstrate an attitude at HUD that fosters, aids, and abets the continuing practice of fraud in the HUD Homes For Sale program. It's time to get the HUD Homes For Sale program back on track.
You go girl!
Posted by: grunt | April 26, 2005 at 10:00 PM
I personally know a few and it angers me. If I knew who to report them to I'd seriously think aobut doing it. If they want the property so badly why not wait to see if it comes up as all bidders then make an offer. Buyers with limited funds should be given the first opportunity.
Note from Frances Flynn Thorsen: Report them to HUD as well as to the Broad Listing Broker. That broker should have a compliance officer.
Posted by: rep | May 02, 2005 at 11:12 AM
A person buying a HUD home can have bad credit and need a loan from the FHA, which normally has lower interest rates as well. Applying for a home loan is still necessary when buying a HUD home, unless you have enough cash to buy the house up front. Buying a house from the department of housing and urban development, or HUD, can be a good way to get into your first home. To encourage the low to moderate income makers to purchase homes the government has created a program to make home ownership possible. The FHA appraisal process will note property deficiencies that are readily observable and how they can help with repairing cost. Distressed properties are not always HUD homes, but a lot of times things happen to homes that are foreclosed , because the owner is upset about losing their property.
Posted by: linkmax | December 17, 2006 at 02:17 AM
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Done a brilliant job and Best of luck for your upcoming one!
Posted by: Jules Carney | August 22, 2008 at 11:47 PM
home sales scandal?Why.Sorry, i don't know do you say.Iam From indonesian.And iam active for sale and purchasing in the internet.
Posted by: zeimont | November 10, 2008 at 10:24 AM