What constitutes short sale fraud? - Zillow Real Estate Advice

I don't see fraud. Rather I see incompetence. It's possible that the loan was owned by Wells (or someone else) and it was determined they would be able to assign the debt to Fannie Mae (something that can only be done under certain circumstances). Once that occurs, you're playing by Fannies rules.

What's irksome is that in the event of a foreclosure, the 2nd may not get a dime if the homeowner files for bankruptcy. This way they would've gotten 50 cents on the dollar, which is pretty good for 2nd mortgages (typically 10 cents on the dollar).

Source: http://www.zillow.com/advice-thread/What-constitutes-short-sale-fraud/493019/

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