Is It Fraud to Pay Your Lender?

If you've not already heard the recording, you soon will.  The media is jumping all over this as another reason why the big bad banks are so bad.  A recording of the conversation between a lender representative and a Realtor who is trying to work out a Short Sale for her client is raising flags in many groups.

How is making a payment to the lender that you owe money a "side deal" or fraud?

What if the lender said, "Make 2 or 3 payment on the loan, since you haven't made a payment on in the last 6 months, and we'll release the lien."

The 1st is protecting their net by stating they will only allow so much to the second. For all they care, the 2nd could require the the lien be paid in full, but the 2nd can get no more than a certain amount at the closing. If anything on the HUD shows more money going to the 2nd, the first will not release the lien and require the money be given to them.

The 2nd lender doesn't care where the money comes from, they just don't want to get screwed anymore than they already are. If they can double what they get, by getting $2,000 or $6,000, everyone wins. (Even though the lien may be $50,000).  Seller gets to short sell their house, the agent gets paid and a buyer is in their new home.

The 2nd will get nothing if it forecloses, but nobody gets anything at that point except the 1st who gets a house they never wanted in the first place. Realtor loses, seller loses, buyer loses, economy loses.

Is it fraud to make a payment on your loan?  Isn't that what buyers agreed to do in the first place?

I've heard many Realtors lately saying that they understand the value in hiring a negotiator to deal with the lenders. The best, most experienced negotiators can be found at
ManageMyShortSale.  Their goal is to get everyone paid as much as possible.