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Charges filed against bank employee for falsifying short sales

During the recent recession, hundreds of thousands of people were confronted with the altogether tragic reality that they would not be able to keep their homes despite their best efforts. However, many of these people decided to take an altogether different route rather than letting the bank foreclose on their home.

They opted to pursue a short sale, which is simply a transaction where the bank agrees to accept less than what is owed on the mortgage. A viable alternative to foreclosure, short sales generally cause far less damage to credit, avoid certain taxation issues and grant homeowners far more control over the sale of their home.

Interestingly, a former employee of one of the major mortgage lenders here in the U.S. is now facing a multitude of federal criminal charges stemming from allegations that he illegally manipulated the short sale process in exchange for bribes.

According to a 28-count indictment, the 28-year-old defendant was formerly employed by Bank of America to handle short sales in the Los Angeles area. However, the indictment accuses him of selling 18 properties via short sale at prices well below those that would otherwise have been considered acceptable by BofA in exchange for over $1 million in bribes from buyers.

The indictment goes on to allege that the defendant was able to accomplish his improper approval of the short sales, which included property in the posh Beverly Hills and Bel Air neighborhoods, by forging bank records.

"The buyers would either resell the homes at the actual property values or in some cases would refinance the property at the actual value, thereby extracting profits on the deals," said the assistant U.S. attorney handling the case.

The defendant pleaded not guilty to the charges last month and was released after posting a $100,000 bond. However, the federal government has seized his sport utility vehicle and is currently in the process of seizing his home on the basis that both were secured using illegally gained funds.

While this story is certainly interesting, it's important to remember that it is an isolated incident and in no way indicative of the typical short sale process which can provide homeowners with much-needed relief. Consider contacting an experienced attorney if you would like to learn more about short sales, foreclosure or any other real estate issue here in South Carolina.

Source: The Los Angeles Times, "Former BofA employee accused of taking bribes to rig short sales," E. Scott Reckard, Oct. 16, 2013

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