Some official opinions on Florida ’s Foreclosure Fraud Law FS 501.1377

By
Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826

A few weeks ago, I gave my "unofficial" opinions on this controversial new law that is now Florida Statute 501.1377 (formerly HB 643).  You can read the entire 14 page law at this link. Now some official opinions have come out on it. 

The big issue is that many non-scam artists appear to NOT be exempt or to be only partly exempt including lawyers, title companies, real estate brokers, sales associates, and owner occupant buyers. Here are some opinions that have come out on the new law:

Jacksonville bankruptcy lawyer, Chip Parker: Web link  

South Florida foreclosure lawyer, Michael Wasylik: Web link - He goes so far as to say that legislators now realize the law has a "glitch" in it because of the exemption issues.

Orlando lawyer for the Orlando Regional Realtor Association, Jim Mitchell: Web link

Andy Tolbert, Realtor and a director of Investors Resource Center in Central Florida: Web link

I have also seen a bulletin from First American Title that sets forth a big stack of new procedures for dealing with foreclosures.  These procedures are going to make title agents, attorneys, Realtors, and investors wanting to close a foreclosure or short sale transaction have to jump through quite a few extra hoops.  It might actually kill a few pre-foreclosure deals that are up against a hard deadline for a foreclosure auction or short sale payoff.  If anyone wants me to email them a copy of the bulletin, just let me know.

I spoke with the Florida Association of Realtors' legal hotline again just yesterday and the attorney I spoke with said that FAR's official position is to NOT address this law at all.  FAR does not even plan on drafting up disclosure forms as described in this law.  What?!?! 

FAR apparently looks at this law as focusing on scam artists and not on legitimate Realtors working short sales or the average buyer wanting to buy a house.  In their eyes foreclosure-rescue consultants are a completely separate business then being a real estate broker - he went so far as to say that FAR does not address how "hot dog stand" vendors operate either.  If a buyer or Realtor is actively targeting foreclosures or telling someone that they could stop the foreclosure that might be a different scenario, but for regular buyers and Realtors FAR is of the position that the law would not apply.

Uhhh!  How many Realtors are out there right now mailing postcards, knocking on doors, and doing all sorts of targeted marketing to people in foreclosure??? Hundreds? Thousands?  We need some guidance here. Not addressing the issue and hoping that Realtors are not violating the law does not cut it in my opinion.  Hopefully FAR will at least publish something in the upcoming months.  If they don't, in my opinion FAR is doing a disservice to its members and potentially jeopardizing members' licenses and careers.

I am glad to see that attorney Jim Mitchell stepped forward and addressed this issue although he was quite vague in much of his interpretations on what activities would constitute a foreclosure-rescue consultant.

What a big mess?!?!  At least we have until October 1, 2008 to figure out how to deal with this new law. Maybe the legislature can fix this in the next session?

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(Copyright © 2008. Sand Dollar Realty Group, Inc. All rights reserved.)

Rob Arnold - Your full service and investor friendly Realtor in Orlando and Central Florida.

ABR, CPL, CRB, GRI, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 / 1-877-389-7318    www.SDRhouses.com/   www.WeBuyHousesFlorida.com/

Learn to invest in Central Florida real estate and Orlando real estate. Investor mentoring and counseling available. We sell properties, list properties, and we buy houses cash throughout the Central Florida & metro Orlando area.  

I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central & South Florida, the Space Coast, and the Treasure Coast including Orlando, Winter Park, Maitland, Ocoee, Winter Garden, Apopka, Altamonte Springs, Casselberry, Longwood, Winter Springs, Oviedo, Lake Mary, Sanford, Deltona, Debary, Deland, Mount Dora, Eustis, Clermont, Kissimmee, Winter Haven, Lakeland, Tampa, Sarasota, Bradenton, Miami-Dade, Fort Lauderdale, West Palm Beach, Port Saint Lucie, Melbourne, Daytona Beach, Ocala, Gainesville, Volusia, Brevard, and more.

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Rainer
494,722
Lynn911.com ~ Dallas Real Estate Agent Top Team
Dallas Houses for Rent Dallas Apartment Rentals Lynn911.com - Dallas, TX

Dallas homes for sale, Call 972-699-9111 Lynn 911 Dallas Top Real Estate Agent, Dallas homes for sale, Dallas home foreclosures for sale, Dallas homes for sale, Dallas foreclosures, Dallas apartments for rent, Dallas apartment rentals, http://www.lynn911.com , http:// dallasapartmentforrent.blogspot.com/Many investors, home sellers, listing agents need to "see it coming" I field more calls a day I can smell so why waste my time. good luck have a great 4th of july.

 

Jul 01, 2008 02:19 AM #1
Rainer
78,084
Rebecca Schrader
Competitive Insurance of Dundee - Dundee, FL

It sounds to me like they want to help some of these chuckleheads that sell their homes way under market.  But it also sounds like this law is going to need a lot of tweaking.  I've seen situations where people quit claimed their house to a shady character and it was way to easy to sign the papers and get tricked.

Jul 01, 2008 02:29 AM #2
Rainmaker
1,141,948
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Rob, It looks like I have a lot of reading and catching up to do. I have not read the law yet so will have to get back to you with my opinion. I do know that something needs to be done about the foreclosure scammers. I think CA has a very strict law about preforeclosure properties. OK I will study this with my coffee in the morning.

Jul 01, 2008 10:18 AM #3
Rainer
32,233
Sidney Jimenez
Keller Williams - Miramar, FL
CDPE, Short Sale Expert, 954-665-9449,

ROB--I commented on this issue to you a few weeks ago and I haven't seen anything to change my position. The links you provided are clearly talking about lawyers and their concern because of the fee structure. And again, I contend that this law is not relevent to the normal real estate transaction with a licensed Realtor. We are not charging upfront fees and the sellers doesn't even end up paying our commissions. This is a very targeted law and very specific to the scams that are being thrust upon the vulnerable homeowner. I can see the lawyers being hesitant and it's only because of their "upfront" fee structure. The Realtors are only paid if the home is sold and the end result is achieved. I've read the law several times and it seems crystal clear to me.

I do applaud your diligence on the subject. I'm sure you'll find the true answer either way.

Jul 02, 2008 05:20 AM #4
Rainmaker
1,010,246
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Sidney - I realize its intentions are very targeted, but its language is pretty confusing.  I'm not the only one concerned by it as you can see.  The FAR attorney did tell me that if you as a Realtor are marketing to homeowners that you might be able to stop their foreclosure that this could fall under the new law.  All I want is an official statement from someone in authority stating what is and what isn't the right thing to do. 

Jul 02, 2008 07:42 AM #5
Rainer
32,233
Sidney Jimenez
Keller Williams - Miramar, FL
CDPE, Short Sale Expert, 954-665-9449,

ROB--Well, I understand your point, I do. It seems most of the folks that are up in arms are the lawyers. They seem to have a problem because of all the disclosures that could be involved. I'm sure they will come out with a little page distancing themselves from the "foreclosure rescue" folks. As far as Realtors, we are not rescuing or stopping foreclosures, we are selling their homes before they get foreclosed. I see the wording very clear for Realtors and the sale of these homes. I don't see the confusion you do.

Jul 02, 2008 08:17 AM #6
Rainmaker
1,010,246
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Sidney - The title companies are getting up in arms about this too.  The First American Title bulletin on this law is 4 pages long.  If you notice in Jim Mitchell's response, he is kind of vague.  He basically says if you think you may be violating the law you need to comply with it - that doesn't set my mind at ease considering I have 70 Realtors working under my license at the moment.

Jul 03, 2008 01:43 AM #7
Rainer
32,233
Sidney Jimenez
Keller Williams - Miramar, FL
CDPE, Short Sale Expert, 954-665-9449,

ROB--I can certainly see the issue you may have since you have the resposibilty of so many people performing under your license. My point of view is from the Realtor that is going about their business as an agent in the course of a real estate transaction. For the Realtor doing a normal deal, whether it is a short sale or not, this law does not impinge on their career.

From what you are writing, it seems your concern lies with the actions 70 Realtors that are operating under your umbrella. As a whole, this new "law" will not affect the everyday, ethical Realtor.

Jul 03, 2008 02:36 AM #8
Rainmaker
1,010,246
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Sidney - FAR apparently agrees with you.  My biggest concern is that someone might accidentally cross the line into a foreclosure consultant.  Just because someone is ethical does not mean they can't get in trouble regardless.  It would be great for FAR to come out with an official statement.

Jul 03, 2008 02:52 PM #9
Anonymous
Jonathan Rivera

Rob:  I tend to agree with Sidney on this one.  As a Real Estate Broker and Investor there are clear differences in what we do.  I take a listing on a property and sell it to a buyer.  The bank pays me at closing.  If I'm buying a deal from the start, then I wouldn't list it, but I wouldn't charge a fee either.

I don't feel like this law is targeted towards Licensed Real Estate professionals.  However I understand the point that the verbiage can be vague therefore leaving it open to interpretation.

As for the title companies being up in arms....whenever there's any new legislation they issue company bulletins.  This is caused by the attorney's who work at, or for these companies.  You know how attorneys love to overkill on every little detail.

I think we can resolve the issues and continue working th business without too many hang ups.  A long as we draft the proper disclosures and conduct ourselves as professionals we will be OK.

 

To keep up with what we're doing to stay on top of the Real Estae business, visit us at:

http://jonthansblog.wordpress. com/

*cut and paste the link to your browser and remove the space between wordpress. com/

 

Jul 04, 2008 05:57 AM #10
Rainmaker
1,010,246
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Sidney , Jonathan - I think both of you are right.  The legislature's intent was most likely to exempt real estate agents, and probably title agents and attorneys not getting exempted was an oversight.  However if we are incorrect in this assumption, we could be comitting a CRIME.  That is why I hope for some official clarification from FAR.  At least if they give us some guidance, we can say we acted in good faith if a problem ever happens.

Jul 04, 2008 02:09 PM #11
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