This post has the potential to be inflammatory so let me begin by saying, "I'm just the messenger."
In Georgia there are two attorneys who are considered to be and are, in fact, held out to be the real estate contract experts. By experts I mean they wrote the book on Georgia real estate contract law. "The Red Book on Real Estate Contracts in Georgia" published by the Georgia Association of Realtors was authored by firm partners Ned Blumenthal and Seth Weissman of Weissman, Nowack, Curry & Wilco, P.C.
Mr. Blumenthal recently wrote an opinion letter ("The Letter") about how the new effects of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 wherein it relates to negotiating mortgage terms. When I say this has already been discussed among Mortgage Loan Originators (MLOs by license) the topic of real estate agents discussing loan terms with clients did arise. Instead of jumping on the knee-jerk bandwagon I opted for the "time will tell" approach.
The Letter seems to hold more with a recommendation, ne admonition, for agents who do not hold a National Mortgage Licensing Registry MLO license to avoid talking about loan terms with clients under what could possibly be the jurisdiction of NMLS and the S.A.F.E. Act.
The Act, in fact and according to Mr. Blumenthal's Letter plainly states, "it shall be prohibited for any person to engage in the activities of a mortgage loan originator without first obtaining and maintaining a mortgage loan origination license."
The Letter continues in Mr. Blumenthal's own words to state/ask, "Normally, real estate brokers and agents do not get involved in negotiating with the terms of loans for their clients and should not run afoul of the Act. However, what about in short-sale situations? If an agent contacts the seller's lender trying to negotiate terms for a short-sale, does this violate the Act?"
Without copying verbatim The Letter, which is three pages printed, we should skip to the punch line. Remember, Mr. Blumenthal and Mr. Weissman are the preeminent real estate law attorneys in the state. This is not hearsay from some bar room talk with a couple of loan officers and a closing attorney. "We do not have any definitive case law on this yet", writes Mr. Blumenthal, "but the answer certainly appears to be 'yes'".
- Get your NMLS license and find a lender/broker to sponsor you.
- Team up with an NMLS licensed MLO and let them handle the negotiations for you.
- Your thoughts and ideas?