I am not as seasoned of an agent as some may be so maybe I am a little naive in thinking the way I do but as Realtors and Real Estate Agents, don't we have a duty to uphold laws and ethics? Why is it I see some skirting around them and getting away with it? Oh, and we sit and wonder why Realtors have bad reputations...like the used car salesman stereotype...
Okay so I am venting a little, but when I have another agent who has more experience than I and should know better try to force my clients and myself into closing with her sellers title company & buy their title insurance and willingly not share with us easement problems and possible pending litigation on a property we were trying to buy... I get a little peeved! Good thing I am industrious enough to do my own research and find out what is going on and find a remedy of my own. Too bad for the buyers who came in after us and swept the contract out from under our feet after we had accepted the banks counter offer (got to love foreclosures). Their agent hasn't spoke with the owners of the adjoining land that actually holds the right of way to the road to find out that they will have to sue/ pay for access before it will be granted because the seller's agent isn't going to tell them! She probably won't tell them that if the 20 acres adjoining this 2800 sq ft beautiful log house and 10 acres is not bought as well, it is to be subdivided into unrestricted lots that can have mobile homes moved onto either. Won't that make it a dream home?
My main issue with this whole thing other than well, yes losing the sale just sucks- is that agents who are allowing and aiding and abetting REO companies to violate RESPA laws should be held accountable. These are Section 9 violations!
With the growing number of foreclosures many banks are selling properties. Many of these entities require their own addendum to the purchase agreement, which is often ten to twenty pages long. One provision almost all of them include is something along the lines of, "Seller shall select the closing agent," sometimes even, "Buyer shall pay for all title insurance from the title company selected by Seller." This is exactly what we were told after we accepted the counter offer. Apparently, these banks, agents, and the attorneys who prepare and present these addenda are not familiar with RESPA Section 9 (12 U.S.C. § 2608).
(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.
(b) Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance. 12 U.S.C. § 2608.
Even where the seller specifies the closing agent, leaving the selection of title insurer up to the buyer, there is still a Section 9 violation. The key word in the statute is "indirectly." Here's the idea:
1. The purchase agreement specifies that the seller shall designate the providers of title and escrow/closing services. (This may be interpreted as a direct requirement that the buyers utilize the title company selected by seller.)
2. The buyers' lender will require a mortgagee's policy of title insurance.
3. This lender will also require an insured closing protection letter (CPL).
4. In order for the CPL to be effective, the same company must issue both the CPL and the mortgagee's title policy.
5. Since the seller is specifying the closing agent, the seller is requiring, at least indirectly, that the buyers purchase the mortgagee's policy from a particular title insurance company.
Therefore, this requirement violates Section 9 of RESPA
How will this look in court especially knowing that the property has an easement problem to be litigated? Seems like a sort of cover up to me.
But who am I? Just a newer agent that takes her job seriously and won't be quiet about it.
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