The real estate firm Elias Realty, located just to our south in Livonia, has found itself in hot water this month after the FBI issued a search warrant on their offices a week ago. Although the former state attorney general representing the firm in the case is confident that the FBI will find no wrong doing, it has stirred up many of the problems the company has been having with Freddie Mac over the course of the last few months.
When the FBI first issued their search on the office, little was known about their reasoning behind the search; but after some investigating, former state Attorney General Mike Cox discovered that the search was a result of a complaint filed by the Federal Home Loan Mortgage Corp., also known as Freddie Mac. The complaint accuses Elias Realty of committing fraud by allegedly hiding the fact that some of his clients had already purchased second homes while performing a short sale on their first property.
In a letter sent to Elias Realty on Oct. 1, Freddie Mac alleges that borrowers were instructed to purchase a new home “prior to applying for short sale assistance on the Freddie Mac loan” and also claims that many borrowers’ inability to repay their loans was “not genuine.”
Elias Realty and it’s attorney disagrees pointing out that they have done nothing wrong and are simply following the rules passed down to them from Freddie Mac. Cox points out that the stipulations for a short sale do not prohibit a homeowner from purchasing a second home. This is especially true for people moving for a new job or military service that do not qualify under Freddie Mac’s short-sale standards for hardships.
At the end of January, Elias Realty filed suit against Freddie Mac after being placed on the exclusionary list. Because of the blacklisting, Elias Realty has lost nearly 500 clients and left many more frustrated with the constant road blocks associated with selling their homes as a result of the feud between the mortgage lender and the real estate firm.
Although Elias Realty’s attorney is confident that the FBI will find no wrong doing on his client’s part, the recent real estate litigation that his client has had to endure as of late could have detrimental effects on his clients now and in the future.
Source: The Livingston Daily, “After FBI raid, charges not likely for Elias, says former state AG,” Karen Smith, Mar. 4, 2013