ATTENTION REAL ESTATE LICENSEES: HOW TO LOSE YOUR LICENSE!

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

                                                * * * *  HARD CORE REAL ESTATE TALK  * * * *

WARNING!  THERE APPEARS TO BE A COTTAGE INDUSTRY DEVELOPING FOR REAL ESTATE AGENTS:

LOAN MODIFICATION ADVICE

Read on Inman this a.m. an article "Loan modifications: salvation or scam?" in which they describe and even recommend that real estate agents can provide this advice and even charge for it. 

* * * * shared a number of ways that Realtors can legally assist their clients in navigating through the loan modification process and, in some cases, be paid for their efforts, more. . . . .

I believe that this is very risky business for any licensed real estate agent or broker.

Offering loan modification advice to a home owner is not, IMO, our business. We are neither trained nor skilled to give such advice and may violate the scope of our license to do so.  I'd be interested to know whether an E&O insurer would represent a real estate licensee in a claim against them for mortgage modification advice.

Most of the real estate agents I know don't know the difference between a deed and a deed of trust. Nor do they understand the structure of the loan/loan servicing, investor, markets and relationships.  When the vast majority of real estate agents must send a prospective home buyer to a loan officer for simple price range pre-qualification, the thought of those same agents giving advice and charging for it to home owners in mortgage distress sends shivers down my spine. 

IMO, real estate brokers/owners would be advised to have written policy limiting their agents' ability to offer loan modification services, paid or unpaid.

REALTORS® CODE OF ETHICS

Article 11
The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected . . more.  . . . .  

REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence . . more. . . . .

                         Home Owner Family

"Honey, how can the mortgage company be foreclosing?  I thought our agent was helping us get our mortgage modified."

"I don't know Dear.  They promised that our loan was one that would be easy for the mortgage company to modify so we don't lose our home." 

Courtesy:  Lenn Harley, Broker, Homefinders.com, 800-711-7988.

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Re-Bloggged 5 times:

Re-Blogged By Re-Blogged At
  1. Darrin Friedman 08/09/2009 08:41 PM
  2. Jennifer Marks 08/10/2009 09:04 AM
  3. Christy Ruschel 08/10/2009 12:09 PM
  4. Kathleen Floryan, Broker Associate 08/10/2009 01:32 PM
  5. Johanna Knight 08/11/2009 08:12 AM
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Topic:
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Comments 228 New Comment

Ambassador
2,273,906
Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Mark/  Agree.  Me too.

 

August 20, 2009 03:58 AM
Rainer
110,832
Charles Perkins
Charles G. Perkins, CPA

As I understand it the mortgage company is the one that eventually decides on when or if they will do a loan modification.  Outside professionals or businesses are trying to sell you on the fact that they can provide support as to why this loan modification should be done.

August 23, 2009 12:48 PM
Rainer
22,493
Jerry Spicer
Sonoran Property Inspections LLC

What a way to loose your license and get sued all at the same time. I can't imagine an agent not understanding this. I would imagine an E&O Insurance company would leave you hanging in a new york minute if they found out you are practicing Mortgage advice on the side. 

August 23, 2009 11:13 PM
Ambassador
2,273,906
Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Charles. Indeed and sometimes they violate RE license law when they do so.

Jerry.  I believe that E&O would leave you hanging anywhere for these acts if they violate license law.

 

August 24, 2009 05:15 AM
Anonymous
wayne robison

With all due respect this is bad advice.  Real estate agents are providing loan mod assistance for 3 general reasons:

To make money on the loan mod

To generate short sale listings

Because they are asked

As long as the agent has educated themselves on the nuances of loan modifications and operate within their state laws, they would be doing the market a disservice not to offer assistance (paid or not).    The fact of the matter is that loan mods are not rocket science especially once federal guidelines were instituted. 

Now, if you really want to risk your license, go ahead and learn nothing about loan mods and list and sell a home short.  Only later to find out that the homeowner has contacted the Attorney General and filed a complaint against you and your Broker because they learned, post sale, they were eligible for a loan modification under the Making Home Affordable Plan, BUT their Realtor never said anything about it.

Good Bye license, Hello law suit.

All the best,

Wayne Robison, www.ForeclosureU.com

October 03, 2009 08:57 PM
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Lenn Harley

Real Estate Broker - Virginia & Maryland
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