Our investigation into allegations of short sale fraud by some of the nation's major lenders certainly struck a nerve in the lending community, but it also served to show me just how uneducated many in that same community still are, even today.

It's clear from the dozens and dozens of comments on the blog page that many mortgage professionals still aren't sure how exactly short sales work, and what is and is not legal.

Due to some technical difficulties on air Friday, I was unable to show a couple of MLS listings that were sent to me that clearly, on the public listing, demanded cash to the second lien holder outside of settlement as part of the transaction. Just so you know, that's illegal. Yes, a second lien holder can demand payment on the loan, but it has to be documented as part of the sale.

And then just a few minutes after the story aired Friday, I received another email from my whistle-blower, Kayte Gentry:

Diana - we thought it funny that this came in about 10 minutes after the 2nd airing of the story...the email is to my Lead Negotiator.

"Linda,

The agent contribution of $500.00 can't show on the HUD. Have that removed and resend just the HUD.

If it shows on the HUD the investor thinks they are getting it and not the 2nd lien holder."

More Top Stories

Economists Expect Slower Growth in Second Half

Friday Look Ahead: Markets End a Hot July Looking in the Rear View Mirror at Q2 GDP

Samsung Elec Warns of Weak Profit After Record Earnings

IMF Says Some Small US Banks May Need Capital

Li Ka-Shing to Buy EDF's UK Power Grid Assets for $9.1 Billion

More Top Stories