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1996 BayHouse Moron of the Year

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Copyright 1995 - 2005
All rights reserved.
Christine Baker



 Real Estate and Mortgage Lending

are Regulated by

STATE and FEDERAL Legislation

Customs vary by Region

I experienced Real Estate since 1987 mostly in the San Francisco Bay Area as a Tenant, Buyer, Seller, Borrower, Landlady, Investor, Student, Real Estate Agent, Real Estate Broker, Loan Broker, Lender, Credit Consultant and Complaint Filer.

Please note that I am NOT a lawyer or CPA and I don't give legal or tax advice.

Selling Agent
Listing Agent
Dual Agent
Real Estate Broker
MLS (Multiple Listing Service)
Public Records
SAMCAR (San Mateo County Association of Realtors)
CAR (California Association of Realtors)
NAR (National Association of Realtor)
Mortgage Brokers
CAMB (California Association of Mortgage Brokers)
Mortgage Bankers
CMBA (California Mortgage Bankers' Association)
DRE (Department of Real Estate)
DOC (Department of Corporations)
OTS (Office of Thrift Supervision)
Banks, Thrifts and S&Ls
HUD (Department of Housing and Urban Development)
Corporate Power
Feedback from the Real Estate Professionals
"In keeping silent about evil, ..." by Alexander Solzehnitsyn

Real Estate Salesperson (Agent)

In California, real estate and *some* loan agents have to be licensed by the Department of Real Estate. The official term used by the DRE for an Agent is "Real Estate Salesperson."

To become licensed, one has to be at least 18 years old, pass the real estate principles class and the State exam. It's no big deal. Prep schools and correspondence classes guarantee passing the exam or your money back. Within the first 18 months two more classes have to be completed, most Agents take correspondence courses and it's very difficult to fail.

Every 4 years the license has to be renewed and 45 hours of continuing education have to be completed. The CE tests have now been eliminated as nobody ever failed.

Selling Agent (Buyer's Agent)

The DRE decided to officially call the Buyer's Agent SELLING Agent.

On the "AGENCY DISCLOSURE" required to be signed by the Client prior to writing up an offer or taking a listing, the Buyer's Agent turns into the Selling Agent.

They could have called the Buyer's Agent simply Buyer's Agent.

But why make it simple when you got a chance to confuse people?

Listing Agent

That's the Seller's Agent.

Dual Agent

As per DRE definition, the Agent represents both the Buyer and the Seller.

I have never been a Dual Agent, as I have yet to figure out how to negotiate with myself. Effectively, both Buyer and Seller have NO representation.

The Agent is the clear winner with a much higher, often double Commission.

Real Estate Broker

The exam for the Broker's license is longer and more difficult.

The exam contains many questions about real estate taxes and law. Only a Broker can operate a real estate or DRE licensed loan company. While the consumers usually deal with an Agent, the Broker is liable for the Agent's actions.

Some Agents hire a Rent-a-Broker to start their own business. The DRE doesn't officially approve of that practice, but I've seen a number of real estate and loan businesses with no Broker in sight. The Agents call the shots and the "Broker" gets a fixed fee or percentage to supply the license.

A Broker employed by another Broker is referred to as Broker Associate.

MLS (Multiple Listing Service)

The MLS used to be this thick book, published once a week with little pictures and some basic information about most houses listed for sale.

One of the main purposes of the MLS is to ensure that Agents working with Buyers will receive a commission when selling other Brokers' listings.

By placing a listing into the MLS, the Listing Broker guarantees the Buyer's Broker the published Real Estate Commission. Most Agents will not show FSBOs (For Sale by Owner) because they might not get paid.

For many years we have had extremely detailed information available on listed property by using the on-line MLS.

I believe most, if not all MLS are owned by local Realtor associations. A well designed MLS software greatly benefits all parties to a real estate transaction. The only reason why I got my real estate license was because I needed the MLS to establish the asking prices for my properties and the offering price for purchases.

The MLS allows for searches by numerous criteria such as area, price, and of course many of the property features. Bedrooms, baths, pool, type of roof.... you name it, it's probably a searchable feature.

Before writing an offer:

I look at how long the property has been on the market, price reductions and existing financing. I search for other active listings in the neighborhood and most important, for expired and sold listings.

There is a lot of searching and reading involved.

Unfortunately the Peninsula/San Jose MLS, RE Infolink, was very difficult to use.

I can't print the words that came to my mind when I used the system. Even in 1998, when I quit the MLS, it still looked and worked a lot like DOS: codes, codes, and more codes.

It was designed to mislead Buyers into thinking that properties sold close to the asking price.

They only showed the current asking price on most printouts. No mention of the original list price. For a while they wouldn't even include the street address on Client print-outs.

Any database is only as good as the data entered.

Unfortunately, the quality of the MLS was not that great. Many Agents did not supply the sales price after closing, did not revise the status on pending sales and often entered inaccurate features.

I admit that RE Infolink made it extremely difficult to enter a listing properly, but the Agent should review the data and make the appropriate changes until the property information is complete and correct.

The worst Agents are those who purposely do not enter a pending sale.

Nothing was more frustrating than showing a home and spending several hours with Clients discussing an offer, only to finally get a call back from the Listing Agent 4 days later -- informing us that the property had sold weeks ago and is about to close.

Public Records

There are several hot-lines by Consumers Union and other organizations offering public record sales price data. They charge by the minute or per property and I recommend you don't waste your money.

Check the Forum for postings on sometimes even free data services.

I have subscribed to on-line services providing public record data for years and routinely researched the public records prior to writing offers.

The property information (number of bedrooms, square footage etc.) provided by public records is often inaccurate and limited.

However, public record data is great to find out how long a Seller owned a property and how much he paid for it, who is on title, to find out if the Seller owns any other properties, to verify zoning, to obtain some lender information, etc.

Public record data by itself is definitely NOT the way to find out how much to offer for a house, as recommended on some WWW sites and in the real estate newsgroups.

If you work with a Real Estate Agent, request a public record search for all sales within the last 6 months in your target neighborhood. You will pick up the FSBOs and foreclosures as well as other transactions NOT listed in the MLS. The sales prices are usually lower, as those properties have not been marketed and/or are distress properties.

Of course you can always go to your county recorder's office yourself and look at the actual documents.

You'll see first hand how much work is involved in getting the data into a database and why there are so many errors. Looking and taking notes is free, but be prepared to pay for copies. City building departments have charged me as much as one dollar per copy.


Only members of the Association of Realtors are allowed to use the Realtor designation.

The requirements for membership are a real estate license and in my case it was $450 per year. The local organizations such as SAMCAR (San Mateo County Association of Realtors) collect the dues for CAR (California Association of Realtors) and NAR (National Association of Realtors.)

Across the US the general public, reporters and writers as well as Agents and Realtors use the term "Realtor" incorrectly to refer to Real Estate Agents.

There are at least as many Real Estate Agents and Brokers who are NOT Realtors and they are just as good or bad as Realtors.

While Realtors often hype their "Code of Ethics," CA real estate law is much more restrictive. The code of ethics is not enforced and it is just another marketing gimmick.

I was going to file an incompetence complaint against a Realtor in 1995, but found out that the entire proceedings and results have to be kept confidential. I requested some information about the type and number of complaints they received, but they would not release any data.

Consumers should be aware that every Realtor supports conservative candidates by paying their membership dues. Many Realtors do not agree with the Realtor Associations' policy to contribute to all right-wing election campaigns, but still, they're paying the dues.

Anyone NOT supporting conservative causes should try to find a Broker who is NOT a Realtor.

Non Realtor Agents and Brokers are just as good or bad as Realtors.

The Realtors' control of the MLS is debated like no other topic.

While the MLS in California has to be open to all Brokers (Court ordered), I have seen postings from Brokers in other States claiming that they could not join the MLS or were charged much higher fees unless they became Realtors. Based on the number of postings against NAR, it looks like this organization's power will greatly decrease. Membership has been declining and the projections predict a steady drop in membership.

SAMCAR (San Mateo County Association of Realtors)

In 1993 San Mateo County's individual associations merged into SAMCAR. Along with the San Jose Board of Realtors they decided to re-invent the wheel. While San Francisco and the East Bay had very good and easy to use MLS (Multiple Listing Service) systems, they had to design their own MLS, which was subsequently extremely flawed and difficult to use.

CAR (California Association of Realtors)

These are the California Realtors. CAR lobbies in Sacramento and develops contracts to reduce the Broker's liability.

Many of the CAR purchase contracts had no option to NOT agree to binding arbitration. Given a choice, I would NEVER agree to binding arbitration on a real estate contract again.

The CAR contracts favor first of all the Broker, then the Seller. I would not use CAR contracts except when required by the Listing Agent and so far I've been able to avoid these properties.

If you are looking to purchase real estate, ask your Agent for a completed sample contract. READ it and ask questions until you UNDERSTAND it!

NAR (National Association of Realtors)

The main objective of NAR is to lobby in Washington.

NAR lobbies AGAINST consumer protection legislation, AGAINST environmental protection legislation, AGAINST disclosures and FOR tax breaks for the wealthy.

Mortgage Brokers

California Mortgage Brokers are subject to licensing by the DRE or DOC. A Broker can be by far the best source for a mortgage.

Finding a competent AND honest Loan Broker is the challenge. Please E-mail if you think you are one or found one. Don't miss How to Shop for a Loan.

CAMB (California Association of Mortgage Brokers)

Their main purpose is lobbying in Sacramento and helping member Brokers with their marketing.

I had proudly displayed their Code of Ethics in my office. In Spring 1995 I inquired about the number and nature of complaints received from Borrowers. At that time I was still naive enough to assume that they actually investigated complaints. I was informed that complaints were referred to the DRE. I had been a member for a couple of years, but at $500 a year I decided not to renew my membership.

Mortgage Bankers

Mortgage Bankers are the middlemen between Mortgage Brokers and Investors.

They fund loans originated by Mortgage Brokers, often with money borrowed from banks via warehouse credit lines. Immediately upon closing they resell the loans to FNMA, FHLMC, wall street firms, large insurance companies (Prudential), or other institutions and investors. Many home loans are securitized and graded for investments. That's how and why all those different underwriting guidelines are established.

Sometimes a Mortgage Banker will negotiate a special commitment for a fantastic loan program, but the funds are limited and used up quickly.

It's a promotion to get the Brokers' attention, the Brokers in turn get to advertise a great program and take more loan applications.

Most Mortgage Bankers and Brokers operate very efficient, rent cheap office space and skip the marble.

That's why they often have better rates than banks.

CMBA (California Mortgage Bankers' Association)

In 1993 I learned how to "low-quote" at one of the CMBA classes for the "Mortgage Banking Certificate" at Cal State Hayward.

When asked how she quotes, the instructor freely admitted that on the phone she quoted with 1/2 point profit. Once the Borrowers completed the application in her office, she advised them that rates went up. Her office expected to make 1 to 1.5 points per loan. She justified her lies by stating that rates always changed anyway.

She also taught that the Mortgage Broker's Client is the referring Real Estate Agent, NOT the Borrower.

In a role playing scenario on how to take an application, she refused to discuss fixed rate programs as requested by the (student) Applicant. Her reasoning was that the Applicant had signed this contract specifying an ARM and advised the Applicant that she needed to comply with terms of the contract.

What an outrageous lie!

It is the Broker's duty to provide the Borrower with various financing options and nowhere in the contract does it state that the Borrower has to get the loan referenced to in the loan contingency. I wished she got sued into prison.

Several times I discussed the matter with CMBA personnel at various exhibits.

They always promised to get back to me, but it never happened. That same instructor was teaching the class again at Cal State Hayward in Winter 95, and happened to be the president of an organization for women in the mortgage business. Don't be impressed by designations and titles!

During the slump in the finance industry in 1994, many Brokers became Bankers. Some Bankers also have retail departments.

In 1995 the CMBA introduced a new bill to allow mortgage banking employees not to have to be licensed by the DRE when originating loans to the consumers. Instead, a new license is purchased from the DOC. The bill passed, but I don't know who, if anyone, is actually operating under this new license exclusively for Mortgage Bankers licensed with the DRE, so they don't have to comply with the (mostly not enforced) DRE regulations.

DRE (Department of Real Estate)

The DRE is in charge of licensing California Real Estate and some Loan Brokers and Agents employed by a Broker licensed with the DRE.

They handle Consumer complaints against Real Estate Licensees and are doing a very poor job.

Many of the DRE employees including the Commissioner are former CAR officials.

The DRE will not investigate allegations without written substantiation. I.e., DRE licensees are licensed to lie, as long as they don't put their lies on paper. They function much like the Better Business Bureau, working for the licensees who pay their salaries. Unless trust funds were misapplied they support the licensee.

Finally they have a web site," but as of 10/21/99, STILL no E-mail!

The DRE Site contains information on licensing, the quarterly bulletin, FAQ along with their idiotic regulation prohibiting the advertisement of "no cost" loans. I'd E-mail them what I think about their site, but I guess that's why they don't have E-mail.

I filed several complaints against licensees and now have a DRE letter officially approving misleading advertising.

I had questioned a "Renting versus Owning" comparison. The Broker used payments based on an ARM start rate to show how affordable their new lofts and townhouses were. The cost of owning is much higher after the first few ARM adjustments and I felt that the advertisement was misleading, especially as it targeted first-time Buyers.

The DRE replied that nothing was wrong with the ad. I have spoken to Buyers who believed those types of advertisements. By the time they find out how high the payments can/will go, they already signed the sales agreement, picked the color of the carpets and proudly told their friends and coworkers that they're buying this great place.

They'll take any loan just to be able to close. Most first-time Buyers don't have a clue what they're getting into.

And that's just fine with the DRE.

The DRE is a government agency paid for by licensees, ran by Realtors for Realtors.

DOC (Department of Corporations)

The DOC is in charge of California Loan Brokers NOT licensed by the DRE.

No exam is required, just a $200 fee for the Consumer Finance License. The major benefit for the Broker is that the Agents don't have to be licensed at all.

They can hire telemarketers with no real estate or loan knowledge, they sell loans like used cars.

My only experience with the DOC was in relation to the Transamerica case. I was very disappointed when the DOC approved the Transamerica accounting practices and established that Transamerica is above the law. The DOC refused to reply to my repeated requests for an accounting statement on a home loan in foreclosure.

OTS (Office of Thrift Supervision)

In Fall 1995 I received E-mail from a Borrower in foreclosure who had a mortgage with Western Financial. He was going to file a complaint with the OTS because of their refusal to provide accounting statements. Unfortunately he didn't let me know about the outcome. I suspect this office works much like the DOC.

Banks, Thrifts and S&Ls

Loan Officers are not required to have any kind of license or knowledge.

Their only interest is closing loans and creating income for themselves and their employer, the bank. While the individual loan officers cannot "low-quote" as Brokers often do, the banks certainly can change their rates and programs without any notice. They often charge non refundable application fees and their services are very limited (banker's hours.)

Many banks have wholesale departments and offer special whole sale rates to Brokers.

HUD (Department of Housing and Urban Development)

Just like the DOC and DRE, HUD is all talk and no action when it comes to enforcement.

The only purpose of RESPA and Truth-in-Lending legislation seems to be to scare the honest Brokers out of business.

Enforcement is practically nonexistent. They proudly point at a couple of settlements per year, what a bunch of losers!

Their excuse: Congress didn't give them money for enforcement.

HUD works for the big corporations, endorsing CBAs (Controlled Business Arrangements) to legalize kickbacks.

When you have a problem with a Mortgage Broker or Lender, send your complaint to:

Program Compliance Division,
Office of General Counsel, HUD, Room 9253,
451 Seventh Street, S.W. Washington, D.C. 20410.

It would be too cool if HUD published a description of common RESPA and TIL violations on the web. Definitely complain when you are charged cancellation fees on refis and when you are aware of illegal kickbacks.

Referral fees paid for residential real estate loans are prohibited, even when disclosed to the Borrower.

Unless of course you have a CBA or CLO. And I'm not a lawyer, but that's what they keep telling me at the seminars.

Please let me know what the results of your complaint are! I'd love to change my assessment of HUD.

Three times I had mailed the entire Transamerica package via certified mail to the above address.

I never received the green proof of delivery card or any acknowledgment of receipt. Two subsequent inquiries with the Washington DC postmaster yielded no reply. Then I repeatedly contacted HUD via E-mail inquiring about the "missing" complaint. I have yet to get a response from HUD. (10/22/99)

Conspiracy? If you have another explanation, please post it at the Forum.

Corporate Power

Does anyone know why we have different regulations
for originating the same 30 year fixed rate mortgage?

  • Bank of America can advertise "No Cost Loans," but a Broker licensed by the DRE can't.
  • A Broker licensed with the DRE to sell real estate also needs to have all Loan Agents licensed with the DRE.
  • However, the Real Estate Broker can cancel his DRE license, pay $200 to the DOC for a Consumer Finance License, and hire 500 telemarketers as Loan Agents. None of his Agents are required to be licensed.
  • But he can't act as Real Estate Broker anymore.


All I can think of is that most legislators are either too dumb to understand the issues or they are bought by the bank and finance companies' lobbyists. I heard the finance industry is THE largest campaign contributor. Money talks!

Feedback from the Real Estate Professionals

Bert's final E-mail to me:

Subject: Real Estate Definitions (Expanded to Personal Gripe Column)
From: Bert8@GOLDFISH (Bert Carley)
Date: Thu, 9 May 1996 14:38:39 -0700

Dear Chris,

It was others that brought my attention to your R.E. Definitions section. They were also appalled when they found your personal experiences tied to a definitions column. They brought it to my attention, I took a look, and boldly responded.

I do realize that anything anyone says to you regarding your messages must be defended by you. It's only natural. However I do apologize for responding at all to you. It's was obviously a big mistake on my part. It just raises my blood pressure in discussing the matter any further with you.

However you will be interested in two responses I did get to our exchange from other members of the R.E. community. Take notice. Especially to the timm.eml response I have attached to this last and final e-mail you will be receiving from yours truly.


Forwarded E-mail, by


She sounds like the little kid that does not like how some of the other kids treat her so she says, "I'm taking my toys and going home". Does the term "Does not play well with others" appear in all her evaluations from kindergarden on...?

I wouldn't waste my time, or on-line time on her. I have to believe that if she has made that many complaints, they must not have been valid. Otherwise there would have been some action taken.

If by chance you do communicate with her again, thank her for not living anywhere near us, I for one greatly appreciate it.

My public response:

You're right, Tim, I don't like how most Real Estate people "play" this game.

However, I didn't "go home," like most good Real Estate people who quit because they were disgusted with the Real Estate business and lack of ethics.

I decided to go public.

Where do you live, Tim?

WHY do you "greatly appreciate" that I don't live near you?

You don't "play" by your DRE rules and you are worried about me filing complaints against you?

No need to worry, Tim. I know that it's mostly a waste of time to file complaints. I could file literally HUNDREDS of complaints every month, and I have no intention to do so.

I already established and documented how corrupt the system is. So relax!

From your E-mail: "I have to believe that if she has made that many complaints, they must not have been valid."

I'd like some specifics. Why do you *have* to believe that my complaints were not valid? Which documents would you like to see?

Hope to get some answers,


Forwarded E-mail, by helens:

Bert - I got copy of your on-line response to Christine. That woman is sick and definitely needs to be corrected somewhere. Have you had any response from Lloyd or tim? helens

July 23, 1996

;-) thanks helens! And thanks, Bert, for forwarding her and Tim's mail to me. So, helens, for six weeks I waited to be corrected, but nothing happened.

I'm NOT always right!

So please, correct me. Name calling isn't what I'm looking for, neither do I wish to hear your opinion on my health.

Please submit FACTS on specific definitions you disagree with and we can have an intelligent discussion about real estate topics. You are intelligent, aren't you?

So lets hear it!



When Bert Carley first sent me E-mail, bitterly complaining about this page, I offered to publish exactly what he disagrees with and why.

I welcome any and all comments.

Why are they condescending, insulting, and accusing me of making things up?

How do you think they treat their Clients?

Of course I got the original letters from the DOC and DRE regarding my complaints. If anyone thinks I'm making things up as I go along, just verify the facts with these agencies directly or schedule an appointment and I'll show you the originals.

I have been asking for comments from Brokers, but the Brokers who disagree with me know they can't publicly express their true opinions. Their Clients could be reading how they really feel, and that would NOT be good for their business.

The majority of Brokers who E-mailed agreed with most of my definitions, many are very much opposing the Realtors' support for right wing causes. Of course they don't want to post publicly either, because they want to maintain a good relationship with the other Brokers.

Negative feedback to this page from "Professionals" disappeared after I published the E-mails above and the 1996 Moron of the Year Award.

So many people are just whiners and complainers with nothing of substance to say. Please post your CONSTRUCTIVE comments in the Forum, hopefully with your E-mail address, your full name, URL and company affiliation.

It looks like Bert couldn't think of a single definition he disagrees with. I wonder what happened. He is appalled, but can't explain why.

The truth is often appalling, but that's no reason to hide it!

A broker once responded to one of my postings in a newsgroup. She stated that if one can't say anything good about someone, one should say nothing. I think about that often.  Why would ANYONE say something soooooo stupid?

"In keeping silent about evil, in burying it so deep within us that no sign of it appears on the surface, we are implanting it, and it will rise up a thousandfold in the future.  When we neither punish nor reproach evildoers... we are ripping the foundations of justice from beneath new generations."

Alexander Solzehnitsyn

On a daily basis I listen to reports about "civilized Americans" killing pregnant cows, shooting wild horses, poisoning thousands of birds, torturing dogs and cats, killing their classmates in schools ... for no other reason than just because they can.

There is NO foundation of justice. Corporations rule the planet and are above the law.

Is evil about to rise up a thousandfold?

Selling Agent
Listing Agent
Dual Agent
Real Estate Broker
MLS (Multiple Listing Service)
Public Records
SAMCAR (San Mateo County Association of Realtors)
CAR (California Association of Realtors)
NAR (National Association of Realtor)
Mortgage Brokers
CAMB (California Association of Mortgage Brokers)
Mortgage Bankers
CMBA (California Mortgage Bankers' Association)
DRE (Department of Real Estate)
DOC (Department of Corporations)
OTS (Office of Thrift Supervision)
Banks, Thrifts and S&Ls
HUD (Department of Housing and Urban Development)
Corporate Power
Feedback from the Real Estate Professionals
"In keeping silent about evil, ..." by Alexander Solzehnitsyn


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