Banks & MisDirection

Banks use multiple layers of contracted companies to protect and insulate themselves from their foreclosed properties. Here's how it works:

1. Bank forecloses on a property:

A. Bank has some form of a payment collection company (PCC) that handles insurance, taxes, HOA dues, hiring for specific services, etc.;

i. Bank directs PCC to engage a property manager;

a. PCC contracts with property management firm (PMF)

1) PMF contracts with a local realtor to do the monthly property management.

ii. Bank directs the PCC to engage an insurance manager;

a. PCC contracts with an insurance inspection firm (IIF);

1) IIF contracts with a local insurance inspector to complete the work.

iii. Bank directs the PCC to acquire a “Broker Opinion”;

a. PCC contracts with a Real Estate Appraiser firm (REAF);

1) REAF contracts with local real estate agent to complete the “Broker Opinion”.

iv. Bank or PCC engages real estate firm (REF) to manage MLS listing and online auctions

a. REF create listing and auction descriptions which may or may not be accurate

1) REF's, by Washing State law, have an affirmative obligation to disclose any known material facts about the property

These are just 3 examples of how Banks uses multiple levels of companies to insulate themselves. In some areas real estate agents are required to disclosure that a listing is owned by a Bank. Be careful to ask questions regarding ownership and disclosures. Foreclosures are a "Buyer Beware" situation.