I am sure you have seen the Legal Bulletin 188 put out by the NW MLS. My broker forwarded it to me this morning and I am sure yours forwarded the same to you.
The email addresses two items of which I wanted to make an immediate response so all of the real estate agents that work with us at Alliance Short Sales can be set at ease regarding our compliance with both state and federal regulations.
Let me start with the state regulations.
You may not have taken the time to read the "Short Sales - Guidance for Licensees" bulletin released on 12/10/2010 by the Department of Financial Institutions (DFI) and the Department of Licensing (DOL). I am not going to exegete the document for you in this email. What I want to simply do in this email is to draw out a couple of key points.
Summarized in the NW MLS legal bulletin, "DOL and DFI further state that real estate brokers may not charge any fee for providing short sale negotiation services in addition to the normal and customary real estate commission. Of course, this would prevent a real estate broker from charging a separate fee for short sale negotiation services, just like a broker's limited license to practice law."
Everyone's first question after reading this statement is understandably, "How can Alliance Short Sales continue to offer third party negotiation services?" As real estate brokers, we can not.
So who can negotiate short sales? According to the DFI and DOL bulletin, "The Department of Licensing ("DOL") and the Department of Financial Institutions ("DFI") require that a person have either a mortgage loan originator license, a real estate license, or be an attorney licensed to practice law in Washington, to negotiate short sales."
Since the real estate broker provision does not allow for additional fees Alliance must fall into a category described in page 3 of the DFI bulletin.
"Entities engaging in short sale negotiations for compensation must obtain a license under the CLA [Consumer Loan Act] or the MBPA [Mortgage Broker Practices Act], and the individuals who conduct loan modification activities on behalf of such entities must obtain a mortgage loan originator license under one of those two acts."
Fortunately, for Alliance Short Sales, I was a designated mortgage broker. I actually I only sent my license back to DFI in December of 2007. I contacted DFI regarding this needed licensing two weeks ago when I first saw the bulletin. They told me that in order to reinstate my mortgage broker's license I simply needed to submit specific documentation for review. The submission of final documentation will go out to DFI on Tuesday of next week. According to the DFI web site it is approximately a two week turn around from submission for approval.
In closing let me address the MARS compliance. Our MARS disclosures will be similar to those provided by the NW MLS but specifying a fee charged for our services as a mortgage broker. For those agents who are currently working with us on active files I will be sending those to you next week. I will also have a release document for your brokers since we are the MARS company and you are not. It is recommended that you have some record of our compliance to limit your own liability.
Sorry for the long post but I felt it important to let everyone know where Alliance Short Sales stands with these changes. Let me know if you have any questions.
Have a Happy New Year!!!