NHAR came out with some "clarifications" - LOL Leaves me with more questions, but the way I interprest this you can still negotiate short sales as long as it's NOT ON THE HOMEOWNER'S BEHALF.
At the same time, however, a person will not be deemed an originator if they
perform ”real estate brokerage activities,” are licensed or registered in accordance with
applicable state law to perform such activities, and do not receive compensation from an
originator or mortgage broker or banker in connection with a mortgage.4 Real estate
brokerage activities include, but are not necessarily limited to, the following:
1.) Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or
lessee of real property;
2.) Bringing together parties interested in the sale, purchase, lease, rental, or
exchange of real property;
3.) Negotiating, on behalf of any party, any portion of a contract relating to the
sale, purchase, lease rental, or exchange of real property other than in connection
with providing financing with respect to any such transaction;
4.) Engaging in any activity for which a person engaged in the activity is required
to be registered or licensed as a real estate agent or real estate broker under any
applicable law; and
5.) Offering to engage in any of the following capacities.5
”Nevertheless, based upon the broadly worded statutory language, REALTORS must be
careful when handling short sale transactions to not negotiate with the lender on the
property owner’s behalf.”
I guess they believe if you are a conduit, then it's ok. I think from now on I will check a "facilitator" rather than represent the client on my listing agreements. That should cover it.
Bret, I'm not just posting random things
Scroll to bottom of page and click on PDF
That's really interesting Smitty. How did you find out about the existence of this "Clarification" paper? The reason I ask is because I receive updates from NHAR all the time (which I actually read...LOL) and, obviously this issue has been at the top of my radar. Yet I did not see this. Also, I think it's interesting that the date of the pdf is : Article - SAFE Act and Short Sales - 2010.10.pdf. October 2010.
After I originally posted here on October 19th, I contacted Matt Johnson at NHAR. Here is his response to me on October 21st:
"This is an excellent question.Frankly NHAR and I have been struggling with this issue for quite some time. NHAR has not published any information on the topic because there is no clear guidance from the State on how they would apply the SAFE Act to Realtors. We have tried to get some but have been unable to get it from the State.The act really was not intended to target Realtors and I am aware of no enforcement emphasis towards Realtors. We have also tried to get guidance from NAR but they do not have any.
The issue is whether a Realtor is participating in a loan modification when the agent is involved in a short sale. The best advice that I can give you currently based on what we know is that you should make sure to do nothing more than relay information from the seller to the lender and back. You should not negotiate with the lender over the amount the lender would accept or any other terms of the lender decision whether to accept the short sale proposal. You need to be nothing more than a conduit of information back and forth. You also need to be careful not to give advice to the seller about negotiating with the lender or trying to modify the loan. Your job must remain as a Realtor to do your best to obtain the highest possible sale value and once you have a contract or offer in place to provide that information to the lender or preferrably the seller to give to the lender and then have the lender decide what it plans to do. I know that you and many others will probably view this advice unrealistic but other than deciding not to participate in short sales at all, this is the best guidance I can provide as to how to protect yourself. Normally, I would suggest that another step would be to advise the seller that they need an attorney. I still believe that the seller is better off with an attorney but attorneys also are not exempt from the Safe Act so they are limited often in what they can do on behalf of a seller as well.
NHAR is continuing to look into this issue. If we can obtain any better clarity from the State such that we can provide more definitive advice then we will publish guidance."
He must have finished writing this email to me and then written and posted the "Clarification"....LOL