SHORT SALES IN NORTH CAROLINA... If you are not licensed to practice law, you need to read this...

SHORT SALES IN NORTH CAROLINA

 

Over the past couple of years I have observed the rise of the Short Sale. At a recent National Reo Brokers Association function, the President of REOMAC, one of the major default industry trade organizations indicated that 2010 would be the year of the ShortSale...  This would be great if there was a way to get short sales negotiated and closed within a reasonable amount of time.  As a practicing member of the North Carolina Bar, I am attuned to the North Carolina Bar disciplinary actions, and I read the reports from the Authorized Practice of Law Committee several times a week, in the hope I could squeeze further understanding as to what the unauthorized practice of law looks like. Like many of us, we have all tried doing these short sales... I have quit negotiating on behalf of the distressed property holders for many reasons: 1. The servicers and banks have made this process quite an ordeal, and then at the end, its me who looks the fool, when they deny the proposed HUD-1.  2. A distressed seller cannot afford to pay my fair attorneys fee for my time; and 3 When a bank or servicer requires a promissory note or a deficiency, I risk the consumer coming back after me for malpractice... bottom line its not worth it for me to subject my self and practice to this.

I have resigned myself to coaching agents and closing the deal after its approved. . .  ok all is good.

Today I was a guest at a function where an information officer from the legal department of the North Carolina Real Estate Commission spoke and here is what I heard:

It is ok for a real estate broker who is duly licensed in NC to negotiate a Short Sale up until the time a foreclosure action is filed... after that time it is considered the unauthorized practice of law. So, if you are working with a Seller, and a Notice of Hearing is filed then you CANNOT continue to negotiate the short sale unless you are a licensed NC Attorney.. PERIOD...The NC Attorney General is starting to take action on non attorneys who are practicing law with out a license as it relates to Short Sales, Modfications and the like...  Especially in the crosshairs are the national "short sale negotiation" companies...

Based on that news it leaves the question: WHO WILL BE THERE TO HELP THE STRUGGLING CONSUMER????  I cannot afford it,  I cannot afford not to be paid, and I cannot afford reputational damage when a deal dies because a bank takes over a year to work a sale through, or a buyer drops out... 

The Banks have got to do something fast... or there will be no one to do the traditional short sale...