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Can Short Sale Get You In Trouble With The State?

Well, it might.

According to an article published Friday in the Pacific Business News, a new law in Hawaii called the Mortgage Rescue Fraud Prevention Act could mean some real estate agents would be practicing as "Distressed Property Consultants" which requires them to abide by a separate set of rules from the real estate codes. http://www.bizjournals.com/pacific/stories/2008/11/17/story11.html .

So some Hawaii real estate brokerages have stopped listing short sale properties as a matter of policy until they receive some definition as to if their involvement in a short sale would fall under this act.

So a law that was designed to protect homeowners from predators has also prevented them from getting help from the true real estate professionals.

Posted by Fred Pickard Hershey, Pa on 11/17/2008 04:06 PM

Comments (3)

short sales, distresses properties

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3 Comments on Can Short Sale Get You In Trouble With The State?

NOV

2008

Seems to me that this situation could easily have been avoided if the lawmakers simply promulgated the law to require that any person who assisted "distressed" home owners have a valid real estate license.

NOV

2008

Lenn -

Great to hear from you.

This is typical of the knee-jerk reactions from elected lawmakers to the current housing situation.

NOV

2008

We have a Distressed Homeowner law here in Washington that makes any agents assisting a homeowner who is or could potentially be behind in their payments "Distressed Property Consultants". It's a legal quagmire and some offices ban their agents (or certain agents) from transactions involving short sales entirely now. Supposedly it is going to be looked at again by our state legislature in January but... who knows.

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