January 22, 2008

And then, as predicted here, screwed homedebtors started suing the realtors. Oh, yes, this is gonna get interesting now


I hope the likes of Greg Swann, Kendra Todd, Connie De Groot, and all the other cheerleader realtors who gave terrible advice and screwed homedebtors for a commission are a bit nervous tonight.

Here come the lawyers HP'ers. But what took so long?

The 1.3 million six-percenters had a fiduciary responsibility to their suckers (oops, I mean "clients"). Spouting off the NAR's anti-bubble talking points or giving 21 reasons to buy including "year round golf" was not fulfilling a fiduciary responsibility - it was obscuring and spinning so that the sucker would buy the damn house and they could earn their damn commission.

Unfortunately, you can't sue people for just being stupid, and I think most realtors were just being stupid (since there are no job qualifications after all and any stupid person can be one). But when buyers and lawyers can prove a realtor hid facts (like comps or market conditions) or took under-the-table bribes (like the bonus commissions we all know the builders were offering) or kickbacks (from the corrupt appraisers and mortgage brokers) then hell yes, the lawyers are gonna kill 'em. And rightly so.

Feeling Misled on Home Price, Buyers Are Suing Their Agent

Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing boom. What makes Ms. Ummel different is that she is suing her agent, saying it was all his fault.

Ms. Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.

Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.

“Agents have a lot of fiduciary duties, but they don’t make money unless they close the sale,” said Joel Ruben, a real estate lawyer in Manhattan Beach, Calif. “In an inflated market, there are built-in temptations to cut corners.”

36 comments:

happy homeowner in the stix said...

Part of the problem is most of the "promises" made were verbal. No one with half a brain would ever write down that it was definitely going to go up in value. Then you get into a he said/she said situation.

Ms Ummel, however, if she can prove that the other houses sold for less....that's harder to explain away.

More importantly, there's someone connected to this who has deep pockets. A lawyer isn't gonna do this without a possible payout, ya know!

Frank@Scottsdale-Sucks.com said...

Well, as much as I can't stand realtors' sleaziness, I'm no fan of lawyers either.

The bottom line is these so-called "victims" didn't get off their asses and do the research for themselves.

Sorry but they are entitled to nothing in court. Anyone who believed a commissioned realtor and didn't do their own due diligence deserves what they're getting.

It reminds me of some jackass I read about in Scottsdale who is suing his HOA because his house isn't selling. Gimme a break.

Anonymous said...

Suing? I'm waiting for Shooting!

Toby said...

Real estate agents have NO fiduciary duty to buyers unless they are explicitly representing them. The fiduciary duty is almost always to the seller (listing). REALTORS must deal fairly with all concerned which is difficult to define. However, price discovery is not part of that duty to be fair. Some states, not this one, have a dual agency which creates an even bigger headache in that the REALTOR must serve two masters with competing interests.

In this unique case the REALTOR was representing the buyer. As such this may be a good case to hold some feet to the fire!!

Andrew Hac said...

Ummel, is that an Americano last name ? If it is, then it is self-explanatory about the lawsuit and the reason leading to the lawsuit.

Dude, Man, talk about a dog biting its ass.

dumpster diving tonight said...

Unfortunately she will probably win the case these days.Lawyers are worse than realtors.Stay as far awy from ambulance chasers as possible.Two people to never trust, realtors and lawyers. How is greg swan doing these days?Is he collecting beer cans yet?

Anonymous said...

I call BS on appraisers paying for galas and private whatever.

Appraisers DO NOT give kick backs. Never have. They make $150.00 an appraisal and are desperate for business. Yeah even since 2005. Too many appraisers.

The attorneys probably but BS on the apprisers. That made me laugh out loud!

Mark in San Diego said...

Interesting how the worm has turned. . .not that long ago was denial, now people know they are screwed, and in litigation. . .considering prices are now regressing back to 2000, it will only get worse.

Anonymous said...

Are you guys voting for America's national security or Israel's national security?

The Israel Lobby - The Influence of AIPAC on US Foreign Policy

http://video.google.com/videoplay?docid=2894821400057137878

Yoski said...

That's too good to be true. I bet you Edwards is gonna drop out any day now. Ambulance chasers are smelling blood. Lawyers going after 6-percenters. Scumbags going after sleezebags. What a country!

try reading said...

anon @11:49,

if you try looking at the linked article you'll see that appraisers are in fact accused in the case of just that.

"""
East-West employees allegedly asked for and received tens of thousands of dollars' worth of Boston Red Sox and New England Patriots tickets, plus restaurant gift certificates and concert tickets, from lawyers, title companies and appraisers to whom loan officers referred client business.
"""

"""
In addition, East-West induced attorneys and appraisers to pay for semi-private barbecues and charitable galas with Patriot players
"""

Which is exactly what happens in the situation you describe: "too many appraisers".

lender: No sorry Appraiser John we didn't recommend you to any clients this week, slow week and all.
John: I saw Bob this morning, he said he was really busy.
lender: Yeah the people we did see we referred to him, coincidentally Appraiser Bob gave me tickets to the game last week...You know the wife would love to see that concert next weekend, pity I don't have tickets.

Anonymous said...

A lawyer looks for deep pockets to sue, which most realtors today don't have. There is however errors and omissions insurance which some probably have so thats an option. A more logical choice would be the agency (broker), the agent worked for.

Russ DoGG said...

This is too much fun to read! Piling on realtors shouldn't be this much fun.

sic 'em boy!

John Edwards, Ambulance Chaser said...

John Edwards schtick was to always find some family whose kid is in a wheelchair and wheel the kid into the courtroom during the trial to guilt the jury to payout a huge settlement.
Edwards made his fortune by suing doctors claiming that because they didn't perform C-sections, children were born with cerebal palsy. Even though their is 0 medical evidence to prove such a claim. For Edwards, he would just walk in with his pretty hair, spout some junk science, and have the kid in the wheelchair parked at his desk.
Next thing you know, the families were getting million dollar settlements, Edwards was getting his massive cut, and now obgyn's in South Carolina insurance premiuns are soo high, many have left the business or perform many un-neccessary C-sections indangering the lives of the mother and child.
I have 0 sympathy for people who overpaid for their real estate. it was their decision to buy. What next? Suing Macy's because you think you paid too much for a shirt?
I'm sure Edwards will be all over that.

ohsuzzane said...

The bottom line is these so-called "victims" didn't get off their asses and do the research for themselves.

this might be true but if you watch the real-estate commericals, they tell you "this R means something."

well, if people starting losing trust in those folks with "R pins," how can those "marked with an R" defend their fat commissions?

i.e. even if the real-estate industry wins this case, the public's mistrust will remain.

Anonymous said...

Its social Darwinism: The realtors are just part of the food chain, their 6% being taken from the herds of home debtors. Yet, on the bluff watch the trial lawyers. After the onslought the carrion will make for good legislative reports.

Some underwriter in New York is reviewing last years actuarial charts as we read this and adjusting next years E/O policy rates higher than a toxic ARM from CFC.

st. said...

This problem we are facing is a bank failure problem. The problem is the banks and the risk that some or all of them will go to bankruptcy, shut their doors, whatever. They made too many bad loans, "liars loans" etc. These loans are going bad in droves. Further, they made too many loans to builders/developers build new spec houses which haven't been sold. When the developers go belly up, that shifts the debt burden to the bank's ledgers, making the credit problem worse. When banks have bad loans, they have to increase the amount of reserves on hand, meaning, they can't lend as much. This is the ultimate problem. Its a vicious cycle that can't be stopped by lowering interest rates. They've done the same thing on the commercial side (over built), which is only now starting to rear its ugly head.

These rate cuts will not solve the problem. There a huge amounts of bad loans out there, and someday, those debts have to be written off. They cannot be solved by lowering interest rates. What the banks are trying to do is lower rates and reinflate the housing bubble. They are trying to pull another Greenspan, but I don't believe it can work. For example, many of the homeowners now are in trouble bc of ARM loans which are resetting. Even if lowering rates somehow solves that problem (I don't think it will), lowering rates does nothing to sell all the unsold homes on the market. In my area alone, there is a six year supply of unsold lots (not homes). Good luck boys trying to sell all that.

I used to define a recession/slump as a problem which only affected the builders and developers. The worse case scenario is one that affected the banks. We now have a worse case scenario, bc the banks are in trouble. The largest banks in the world are in trouble, so this is as bad as it gets. We have a worse case scenario bc most of the builders have gone belly up or are in the process of doing so. When the builders go belly up, it forces those debts onto the bank's ledgers. For two years now, the banks have been "working with" the builders by not foreclosing, but they are starting too. That's why this problem hasn't bottomed out yet, bc I personally know of many many subdivisions built but unsold, millions in each project, that the banks haven't foreclosed or written off yet. When they do, and the time is coming, some of the banks in my area will not make it. The worse is yet to come. Lowering interest rates will not sell all those lots and unsold homes, not unless a million Chinese come over here with funding from their banks to buy up all our excess. Don't count on that though, bc the Chinese are setting up a subprime team to deal with the fallout to their banks from our subprime mess.

http://www.marketwatch.com/news/story/subprime-crisis-cool-china-growth/story.aspx?guid=%7BA817A470%2D29CB%2D4EAD%2D9BA8%2D46812DBD697B%7D

So, I know what I'm experiencing is not a local issue, bc I see the Chinese forming reaction teams and I see people like Cramer crying about it on t.v. Whether one like's Cramer or not, he's right about this, this issue could take out the world's financial system.

I'm also going to post here a post I made on another forum, to give you some idea about how this bad debt thing is being played out, and how practically, it is bankrupting the mortgage companies (their own fault, don't cry for them).

Hopefully, this will illustrate a little bit about what is going on between homeowners massively in debt and the mortgage companies, and the dilema the mortgage companies find themselves in.

Anonymous said...

SUZANNE!!!!!! YOU'VE BEEN SERVED!!!

Rom said...

I can see this. The NAR's line is that the dwelling sellers help consumers through the scary and tricky RE process. There are many uneducated people who might actually put their trust in the hands of a licensed professional. When that professional screws the client the professional should get screwed by the lawyers. If the NAR had any backbone, they'd help get rid of the lying cheats in the system and try to prove their worth. You know, take the high road and show some value. Not that it will happen.

By the way, I like lawyers! Without lawyers businesses wouldn't have anyone to stop them from robbing, stealing, posioning and polluting.

I've happily cashed deserved settlement checks. My most recent one was for Weir vs. 24 Hour Fitness. The lawyers who won that case did their jobs and deserve to be paid.

Anonymous said...

I don't know. I think suing agents for inflating prices is over the top. I'm much more of the "sue the broker/lender" type because I feel borrowers were easily mislead by slick and confusing legal paperwork. Can't feel sorry for the homeowner for being stupid enough to pay more than what a house is worth and then blame the realtor. Heck, here in the Midwest we had people waiting in lines to buy a house minutes after it went on the market and it became a bidding war starting with the asking price. The buyers knew that they were paying more than the house was worth. I just don"t believe they have a case to sue the Realtor.!!!! I do not hold realtors as blameless, but the homeowners have to take responsibility somewhere in all of this and this is where I draw the line. Still, I hope realtors are forced to go and find real jobs because they were opportunists in bringing down our economy.

Illegals Everywhere said...

The fact is that the REIC attorneys will not allow any precedence in this matter. They will fight the first case all the way to scotus.

Case Law here: http://tinyurl.com/3xnz7w

This was not about deceit however the deeper pockets of the RE Firm was found not culpable. I’m sure the agent hid his assets and the claimant never collected a dime.

Anonymous said...

"Sorry but they are entitled to nothing in court. Anyone who believed a commissioned realtor and didn't do their own due diligence deserves what they're getting"

I see this phrase a lot, "do . . . due diligence," and find it ludicrous. The word "diligence" does not refer to a specific action, but to steady effort; it formerly meant "care" or carefulness" in general speech (it still does in legal language), so how can anybody do diligence? One can PRACTICE diligence, one can act with diligence, one can even exert diligence, but one cannot DO diligence, due or otherwise.

Who comes up with these pompous, meaningless phrases?

Anonymous said...

I recently cancelled a contract I had on a house. It was s good deal even by today's standards and dropping prices. My inspector however, found numerous problems with the property. Some major! I had an option on the contract so was able to get out of it without too much expense.

The sellers realtor knew the reason why I cancelled. She offered to take a few thousand off the purchase price but I said "no thanks.

Just for "grins" a few days later I sent her an e-mail using a throw-a-way e-mail address. I acted as if I was relocating to the area and was interested in the property. He response? "The house is in great shape and move in ready." I guess she is hoping some sucker doesn't spend the money for an inspection.

Amazing....

Guitargirl said...

Hey...to John Edwards, the Ambulance Chaser... it's easy to sit there on your computer and spout whatever you want without substantiating it, got anything specific to back up what you are saying or or are you just on a rant? It's easy to rant from behind "anonymous" on a computer isn't it. Quite different when you can quote "credible" news sources (not Fox News).

Buzz Saw said...

Consult a real estate professional. Bwahaha!!

Anonymous said...

Too bad the realtors are all broke now due to their own flopped flips. You can't get blood from a stone. How much is a used silicon implant worth?

“The Road To Hell” said...

This is “The Road To Hell”

http://www.youtube.com/watch?v=1EBw_da7BZk

“And all the roads jam up with credit
and there’s nothing you can do
It’s all just bits of paper flying away from you.
Look out world, take a good look what comes down here.

You must learn this lesson fast and learn it well.
This ain’t no upwardly mobile freeway

Oh no
this is the road
this is the road
this is the road to hell”
_______________________

Good old Chris Rea, a bit prophetic eh?

Toby said...

NOT buying the appraiser BS either. Appraisers don't make enough money to be a player. Appraiser's ONLY concession is to inflate the value for more work. Want to find the kick-backs? Follow the MONEY. Mortgage brokers, REALTORS, Title companies. That's where the bucks flowed through.

01/20/2009 end of an error. said...

Keith,

OT but how are the people in Europe viewing whats going on both here and there. It seems the herd is starting to realise something here. The smart ones are lifting their heads and getting ready to leave the field. By the smart ones I mean bulls that are starting to see the cracks, not HPers. Just curious since you are there.

fred said...

frank at scottsdale says "The bottom line is these so-called "victims" didn't get off their asses and do the research for themselves."

Well Frank -- what do ya think they hired the realtor for? I mean come on! Realtors always brag up what a house is worth, which means they are giving exactly the kind of advise they are now being sued for. Duh.

So, you're blaming the buyer cuz the Realtor was a professional liar? and how many people even know how to find out what other houses sold for? Isn't getting honest comps the realtor's JOB?

Anonymous said...

Aha!

homedebtor versus realtwhore

Liar versus Liar

And now add in Lawyer

So you have Liar versus Liar moderated by Liar ( I mean Lawyer)

xANGRYMONKEYx said...

Both are to blame. F the realtards and F the buyers. You have to be a moron to buy a 800k Condo in Scottsdale or some lame a$$ place like that.

This whole bubble was based on Greed and stupidity. I have realtards in my family who just blasted me for the past few years cause I didnt OWN a house.

Im not a billionaire but Im not worried about the future either now. If I had that stupid house Suzanne wanted me to get, I would have been F'ed!!!!

Anonymous said...

So HP'ers, which is it? First you say that realtors earn 6% for doing absolutely nothing. Now you give them credit for leading everyone astray. Which is it, you can't have it both ways.

For those of you who think realtors do nothing, then by logic shouldn't we all be realtors? I guess they just sit at home all day watching the boob tube and get paid 6% for doing nothing. Sounds like a dream job to me.

Get a grip. This problem is about greed on all levels. The lost sheeple didn't want to miss out on an opportunity to be a homeowner cause all the MSM were going on about rising home prices and missing out. The realtors, greedy, just trying to sell another house, same with mortgage brokers, most of them were kids, and the others title companies, escrows, appraisers, they were just doing their jobs.

This is about greed and group mentality. Now we are all screwed.

brokersleaveyoubroke said...

Well, as much as I can't stand realtors' sleaziness, I'm no fan of lawyers either.

The bottom line is these so-called "victims" didn't get off their asses and do the research for themselves.

Maybe, but in this case the agent represented the buyers. He was paid 30K to represent them and do the research. They hired someone who was supposed to be an expert to do the research for them and he either didn't do it or he hid the facts from them. He should at least forfit his commission for incompetance. If he was the sellers agent he would be off the hook but he was supposed to represent the buyers and give them expert advice. The story does make the point that you shouldn't trust anybody in the REIC.

shtove said...

If the professional indemnity insurer backing the agent goes broke, then the "homeowner" will end up doubling his existing liabilities - just through lawyers' fees.

Another one for the US to stick in its pipe.

Anonymous said...

I don't think the realtor could be sued for not doing his duty, because everyone knows that a real estate agent's duty is to sit on their ass all day, and wait for a call from one of their yard signs. Or, if you're a buyer's agent, then you sit on your ass until the buyer hands you a commission check. Maybe, just maybe, this will put the scare in these sex-percenters, oops, I mean SIX-percenters.