Cash Back Deals in the AZ Desert

October 17, 2008

In the roaring years of Phoenix AZ real estate from 2001-2005 there was a mad dash to make hay when the sun was shining to pan for your proverbial pot of gold in the Phoenix AZ real estate gold rush. (are those enough metaphors? :)

During an economic boom appear those who are bent on profiting illicitly. As a result of greed and some shady business people, came the infamous cash-back deal. Cash Back Deals in the AZ Desert

What is a cash-back to buyer deal? cash-back transaction scenario is where a buy pays more than a home is worth with the extra money being paid from the seller (outside of escrow) back to the buyer

Wikipedia defines Mortgage Fraud Cash-Back Schemes:

“The buyer and seller or the buyer and real estate agent collude to deceive the lender as to the true sale price of a property. The seller or the real estate agent gives the buyer a cash rebate which is not disclosed to the lender. As a result the lender lends too much, and the buyer and/or seller pocket the overage.

Yesterday, I broke a story about a new type of ‘cash-back’ transaction that we have never before seen.Cash back to the seller.

You may ask, I thought cash always go to the seller? The answer is “Yes”, with the ambiguous ’sort of’ caveat.

In the case of a resale transaction, all net proceeds go to the seller. However, in a short sale transaction, where there are no ‘net’ proceeds, no cash would go to the seller.

A new type of deal is starting to pop-up in which sellers , who are desperate, to get some money are demanding funds paid directly to the seller at close of escrow under a separate bill of sale. If the buyer’s do not agree to the payment for goods, usually furniture, televisions, workout equipment, etc…, the seller will not submit the deal to the bank.

Is this illegal?? Probably not, though a gray area that I imagine will soon gather some negative press and litigation. However, is it unethical?? Yes, no matter how you cut it is a cash back scheme to divert money from buyers away from lenders.

As a result of the gold rush we are now suffering a large amount short sales and foreclosures in metro Phoenix and many of the surrounding towns including Scottsdale, Tempe, Peoria, Gilbert, etc…

99.9% of such deals are clean and are with honest people who are in a tough situation due to the economy.

However, some are pushing the boundary of law and crossed the line of ethics.

If you are approached with such a cash back deal or know of participants email: px_cashback@ic.fbi.giv

Make sure you work with a Phoenix Realtor or Scottsdale Real Estate agent who is experienced with short sales and bank owned transactions and knowledgeable with the AAR , short sale addendum.

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Copyright © James Wexler *Cash Back to the seller - Short sales in Phoenix AZ*

If you are listing your home as a short sale in Phoenix Arizona or Scottsdale Arizona make sure you hire an agent who knows how to do short sales and has the experience to get the job done.

Call 480.221.8080 to find out more about Phoenix AZ Short Sales and Scottsdale AZ short  Sales

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Written by James Wexler · Filed Under Articles, Buyers 

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