Legal Ease tails of the loan to the buyer (as the REALTOR®
un-
derstands it), would not likely be a problem (so long as the lender was not paying the REALTOR® do so).
SHORT SALES AND GRMA WHAT ROLE CAN REALTORS®
NOW PLAY IN A SHORT SALE? REALTORS® are allowed to engage in normal real
estate brokerage activities and are limited only by the prohibition against negotiating a mortgage loan for another. However, negotiating a mortgage loan likely includes renegotiating mortgage loans which have al- ready been made as well as negotiating loans which have not yet been made. Therefore, if a REALTOR® pressures a mortgage lender to reduce the balance on a mortgage loan, modify the interest rate on the loan or forfeit a right to pursue the borrower for a de- ficiency, the REALTOR®
who in the depths
of the real estate recession held themselves as short sale specialists and charged a fee for, among other things, renegotiating the mortgage loans for sellers, those days are now clearly over unless the REALTOR® is a licensed mortgage loan originator. As an aside, the Georgia Department of Banking
and Finance even appears to be taking the position that a licensed Georgia attorney cannot renegotiate the terms of a mortgage on behalf of a borrower client unless they are similarly licensed as a mortgage lender. The logic that attorneys do not have the skills or expertise of a mortgage loan originator to negoti- ate the terms of a legal instrument such as a mort- gage on behalf of a client is obviously suspect. Fortunately, since only the Supreme Court of Georgia can regulate the practice of law in our state, look for the Supreme Court to eventually tackle this issue.
WHAT CAN I AS A REALTOR® DO WITHOUT BEING
CONSIDERED TO HAVE “NEGOTIATED” A MORTGAGE LOAN FOR A CLIENT?
While there are no guarantees in this area until the
law is clarified, the author’s opinion as to what is safe and unsafe is set forth below:
SAFE
1. Recommend a sales price for the property to the seller in a short sale situation;
2. Communicate offers to the seller; 3. Provide the lender, if asked, with your opinion of the value and condition of the property;
4.Communicate information, if asked, about sales activity and offers to the mortgage lender;
5. Provide other factual information to the lender, if asked, regarding the property.
www.garealtor.com Georgia REALTOR® 39 a fee to
6.Negotiate your commission with the lender;
7. Assist the borrower in filling out a short sale package;
8. Contact the lender to find out what is required in a short sale package;
9. Include a short sale stipulation, approved by the seller, in the purchase and sale agreement; and
10. Contact the lender for informational purposes to determine if the lender has accepted or rejected a short sale offer.
UNSAFE ACTIVITIES WOUDL INCLUDE:
1. Urging the lender to take less on the mortgage to make a sale happen;
2.Asking the lender to hold off on foreclosing on the property;
is arguably seeking to rene-
gotiate the terms and conditions of a loan in violation of the law. For those REALTORS®
3. Contacting the lender to negotiate a release of a mortgage loan deficiency; and
4. Repeatedly contacting the lender to determine if the lender has agreed to a short sale or to voice your opinion that the lender is not being realistic relative to market conditions.2
CONTINUED ON PAGE 40
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