CONTINUED FROM PAGE 39 Legal Ease
SHOULD GEORGIA CONSIDER REVISITING ITS LAW?
Georgia law goes further than the federal law in
limiting the role and activities of real estate sales- persons and brokers. Specifically, the Georgia law prohibits a REALTOR®
from helping a client find a
mortgage loan while the federal law limits such ac- tivity only when the REALTOR®
is being paid a fee by
the lender. Specifically, the federal law exempts real estate licensees from performing mortgage loan ac- tivities unless the person or entity is compensated by a lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker or other mortgage loan originator. So, for ex- ample, let’s say that a mortgage broker pays a REALTOR®
was licensed as a mortgage loan originator. More importantly this activity is likely pro-
hibited under the Real Estate Settlement and Proce- dures Act (“RESPA”) if it is essentially a scheme to pay the REALTOR®
a referral fee. Representatives from GAR have met with the Geor-
gia Department of Banking and Finance to encour- age them to interpret the state law the same as the federal law. The real problem, however, is that since Georgia’s law is not the same as the federal law, par- ticularly on the question of whether REALTORS®
can
help find a mortgage loan for a buyer, it is hard to know whether the Georgia Department of Banking and Finance, and more importantly, our courts will in- terpret it the same way as the federal law. The Geor- gia law may intrude on constitutionally protected rights of REALTORS® REALTORS®
, criminalize activities that have long done to protect buyers and a fee for taking a mortgage loan applica-
tion. Under federal law this would be prohibited un- less the REALTOR®
limit competition by attempting to restrict commu- nication between REALTORS®
and their clients. In
light of this and the ambiguity over the prohibition against finding a mortgage loan for others, the Geor-
2
There is a fine line between contacting the lender for legitimate informational purposes versus contact that might cross the line and be viewed as negotiating. Since the line in this area is unclear, REALTORS®
are urged to use restraint.
40 Georgia REALTOR®
JULY/AUGUST 2010
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