Tuesday’s announcement that “lenders began
foreclosure against more than one of every 200 U.S. mortgage borrowers
in the fourth quarter,” has the media tracking the “Mortgage Meltdown” and record number of foreclosures, and industry pundits predicting widespread ripple effects from the “Subprime Panic.”
Steven Pearlstein of the Washington Post estimates that “…1.5 million Americans may lose their homes to foreclosure and …hundreds of thousands of homes could be dumped on an already glutted market.” Pearlstein concludes, “What we have here is a failure of common sense. …It’s not a whole lot more complicated than that.”
But some real estate consumer advocates say the story is more complex. They’re calling for the media and regulators to investigate the role dual agents (a.k.a. designated agents) played in creating the real estate bubble and the growing foreclosure problem. During the housing boom, little attention was paid to the conflicts of interest which occur when large real estate agencies try to represent both home buyers and sellers in the same transaction. But one leading consumer advocate predicts homebuyers will take legal action when they realize they have been betrayed by counterfeit buyer agents:
As some home owners get “upside down” on their equity, or lose their homes by foreclosure, you may start to see a rash of litigation against the real estate “agents” who sold them their homes. Probably the vast majority of real estate agents acted as “buyer’s agents” in the transactions, so there is likely the possibility some of these “buyer’s agents” didn’t really perform up to their expectation of “protecting” the interests of their “buyer clients.”
In coming days, we’ll expose the conflicts of interest designated agents would prefer to paper over and the heartbreaking failure of the real estate regulatory system to protect ordinary homebuyers and sellers. If you’ve been a victim of dual agency, designated agency, or other deceptive real estate practice, or know someone who is writing about the same subjects, please let us know. If you are in the housing market now, BEWARE designated agents; and demand a real buyer agent, like The Real Estate Cafe, who can help you save tens of thousands of dollars.