Georgia deeming it illegal to represent sellers for a short sale any longer!

I was just forwarded an email from one of the Top Real Estate attorneys here in Georgia that says they will no longer be processing short sales because it is now illegal for them or the agents to do so without a loan originator license! See copied email below. Has anyone else heard about this? The last I heard we had won this battle and it is legal. I don't know what to make of this. :-(

We have just been informed that the Georgia Department of Banking and Finance’s current interpretation of the law is that law firms may no longer provide short sale assistance to sellers.  The Department is taking the position that law firms cannot do this work without being licensed as a mortgage loan originator.  We, nor any other law firm, are so licensed.

 

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Comment by Ben Benita on August 20, 2013 at 2:10pm

We WILL have definitive answers tomorrow, no "interpretations" or BS.

I spoke to the assistant for the guy at the GA Dept. of Banking that put out that message and she said, and I quote:

"......we have been FLOODED with calls on this and the email that went out was completely incorrect"

The guy I need to speak to at the GA Banking Dept. is tied up this afternoon but we will have a discussion about everything tomorrow.

Until then, I would encourage ANYONE AND EVERYONE helping homeowners deal with the "joy" of short sales;

"TO KEEP DOING IT.....KEEP HELPING YOUR SELLER AND DO NOT GIVE UP ON THEM"

As I understand it, and per Tracie below, things changed in GA on May 6 and for them to suddenly revert back to REQUIRING a loan origination license makes absolutely no sense.....

We Will Keep You Posted!!

Comment by Paul Antonelli on August 20, 2013 at 1:45pm

Wow, 2 weeks ago it was Maryland now Georgia. They said that NAr was going to look into this because it is beyond the scope of normal real estate practice. Soon only mortgage companies will be able to process, facilitate, negotiate short sales. I do mine via work contract with me attorney but soon they wont be able to do them any more.

Fun times ahead. 

Comment by Paddy Deighan, JD PhD on August 20, 2013 at 1:41pm

Sonia, please keep us informed on this....it is beyond ludicrous!!!

Comment by Tracie Norman on August 20, 2013 at 1:39pm

HB 83 which was signed into law on May 6, 2013 exempts real estate brokers and salespersons from having to be licensed mortgage brokers.http://gov.georgia.gov/sites/gov.georgia.gov/files/related_files/do...

Comment by Tracie Norman on August 20, 2013 at 1:30pm

We are looking into this!  We will update you shortly.  The Georgia Legislature unanimously amended their previous interpretation of the Safe Act to protect real estate agents.  I'm not sure how the Department of Banking and Finance can trump the Georgia Legislature.  We've been hearing rumblings of this for a while, but have been unable to find any legislation, etc. in regards to the matter.

Comment by Mike Linkenauger on August 20, 2013 at 1:28pm

Jessica, you are correct.  We facilitate or process short sales, we don't negotiate anything regarding the loan or terms of a loan.  This sounds like it is just an attorney who got ticked off and wanted to throw a wrench in things.  Attorneys have no business in our business, just my two cents.  I've closed several hundred locally and several thousand nationally and never found the need for them, period.

Comment by Pat Perrotta on August 20, 2013 at 1:22pm

Here in Florida, attorneys are allowed to negotiate, but not an agent, so I work under an attorney's umbrella.  Could it be that they can't get a fee from the seller for their negoiation?  That is the way it is here.

ADMIN EDIT FROM MIKE LINKENAUGER - Pat, this is just NOT TRUE.  I have closed near 1,000 short sales in the state of Florida and have never had an attorney TOUCH one of them.  Do not spread false information on our website.  Not only are agents allowed to process short sales, the simple FACT is that servicers and lenders PREFER it this way. 

Comment by Mellanda Reese on August 20, 2013 at 1:20pm

Sonia - I called the GA Department of Banking and spoke to Rod Carnes and he advised that the letter that was sent out by WNCW "90% incorrect."  He stated that they have determined that law firms are not allowed to negotiate short sales however, the clarification/amendment that was put in place in May 2013 and effective as of 7/1/2013 does allow agents to FACILITATE the short sale.  He also stated that they are looking into the letter that was sent out on Friday to find out why this misinformation was given.  Hope this helps.

Mellanda 

Comment by Jessica Schulte on August 20, 2013 at 1:07pm

Hi Sonia,

We got the same email from our attorneys.  The idea is that anyone without a mortgage loan originator license cannot negotiate short sales.  This has been true for us as agents for a long time, Georgia is just now getting around to addressing attorneys about this.  The idea is simply we cannot "negotiate," we can only "facilitate."  This means we can pass factual information back and forth between the lender and the seller, we must be very careful the language that we use when "facilitating" so as not to cross the line into negotiations.  If you want to discuss further feel free to email me and we will set up a time to chat - jessicaschulte@kw.com.  Happy facilitating! Jessica 

Comment by Sally Rackey on August 20, 2013 at 1:03pm

1) This will completely stifle the Georgia RE market

2) What do loan originators know about legal matters such as contracts?

3) Another attempt by the banking industry to control the real estate market?

I would definitely encourage the Georgia RE industry and the legal community to take this to the Georgia state attorney general.

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