Earlier today I got Ron Ballard on the line to get a quick recap of all of the “Emergency” webinars that have been going on this week. I wanted to let the dust settle a bit, let everyone collect their thoughts, before jumping to any conclusions.

Ron and I had a great call today (last minute), but fortunately I recorded it. You can listen to it here:

Here’s a summary of his talking points, if you don’t have 45 minutes to listen to our call:

1. Don’t Panic or Stop Conducting Business

a. Similar to Fannie Mae issuing a news article in July 2009 that didn’t make a difference

2. Understand The LEGAL Perspective

a. Although the news article describes this a “fraud,” it appears to have been written by a non-lawyer and does not analyze the elements of fraud

b. When the investor discloses at the start of short sale processing that this is a purchase intended for resale at a profit, the investor has provided the maximum level of disclosure required under current law

c. If the investor is found to have a duty to “expose it’s playing cards,” then judicial concepts of fairness would call for the servicer/bank/note holder to show it’s “playing cards” such as BPO, loss analysis, etc.

d. “Law” is made by legislations and court rulings. This was only a news article. As such, it lacks legal authority.

3. Freddie Mac Could Adopt This As Business Policy

a. FM is a business – a government sponsored enterprise.

b. As a business it can say how it conducts its business

c. This could become a FM business policy, which then spreads to other servicers/banks, etc.

4. What If Freddie Adopts This?

a. First, keep moving forward with all existing deals. This is not an accurate statement of law and it’s unlikely that you could or would be “prosecuted.” Get independent legal advice.

b. Anticipate that this will likely come up in Freddie Mac deals soon. So avoid adding a lot of FM deals. Can go to www.freddiemac.com to see if FM holds the loan.

c. Consider that other banks, servicers and GSE’s might proceed in this direction

5. Action Steps

a. If you take any kind of “political action,” remain respectful of the FM Fraud Investigation Unit. Speak/write in terms of facts, rational legal discussion, economic policies, and eventual market impacts. It’s not “us” vs. “them.” Acknowledge “bad” “fraud.”

b. Keep up to date on his blog and www.californiashortsalelawyer.com

c. Join Ron Ballard’s email list at www.theresi.com .

Share and Enjoy: