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?
(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
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