ATTENTION REAL ESTATE LICENSEES: HOW TO LOSE YOUR LICENSE!
No doubt there are real estate agents getting involved with loan modification and just like short sales they are stepping into the area of practice best left to the people who do it best........LAWYERS. It is my opinion that in a very short period of time, we will start seeing mega law suits against real estate agents and their brokerage firms for attempting to practice LAW without a license.
* * * * 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. . . . .
"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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