More official opinions on the Florida Foreclosure Fraud Law FS 501.1377

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

This is yet another update on the Florida Foreclosure Fraud Law, Chapter 501.1377, Florida Statutes f/k/a House Bill 643.  You can read the entire law at this website.

Previous posts I have made:

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

Florida's brand new foreclosure fraud law - the good, the bad, and the ugly 

  

Well now I have some more official opinions on this new law that will be going into effect on October 1, 2008. 

Last week Attorney General Bill McCollum issued an official bulletin (which I can email anyone a copy of) stating that the new law does exempt attorneys licensed by the Florida Bar.  Obviously he is stretching his authority here because the law does not mention an exemption for attorneys anywhere in it.  However since he isn't going to enforce it against attorneys, that should make them all feel much relief.

I also had the opportunity to recently listen to State Representative Chris Dorworth speak about various government goings on.  I was very impressed by him to say the least.  His profession is a commercial real estate investor.  His wife works for the Attorney General's office, so he was able to tell us some about this new law.  He tells me that regardless of the screwiness of how the law actually reads, that the intent of the law was to not interfere with licensed professionals or legitimate real estate transactions.  Hopefully that is true and the Attorney General comes out with some official statement to the affirmative.

On Friday I was in a class taught by the Orlando Regional Realtor Association's attorney, Jim Mitchell. I was able to speak frankly with him about his take on this whole law.  He re-emphasized to me that ORRA and FAR are taking the position that the intent of the law was to exempt real estate brokers and associates regardless of the questionable language in the law.  I asked him specifically what he thought about a Realtor sending someone a letter or postcard stating that they could help save a house from foreclosure or something similar.  He shrugged his shoulders and said that this could be a gray area in the law.  The law is confusing and nobody knows for sure what a court might interpret. 

These opinions do give me some comfort, but not 100%.  If you are buying as a real estate investor, the best advice I can give is to follow the law and the required disclosures exactly as the law says. If you are a real estate broker or associate working foreclosures and short sales, my suggestion is to get the seller to sign some sort of release stating that you are not acting as an "equity purchaser" or a "foreclosure-rescue consultant" as defined by this law.

Towards the end of July, I may have the opportunity to actually meet with AG McCollum.  If that does happen, I will formally request that he issue an opinion on how the new law effects Realtors as well as non-investor purchase transactions.  I will try and keep everyone updated as I learn more.

Be careful, it is a jungle out there!

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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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Anonymous
El Numero Juan

Rob,

I admire your commitment to keeping us informed as well as giving us your take on this issue.  For the most part I work the foreclosure market as an agent/broker.  I am moving towards REO's for my investments now.  The agents handling these properties can be a road block, but I think it's a safer place to play as an investor.

I'm sure FAR will put together some disclosures (if they haven't already) for agents to use to protect themselves in this market.

I look forward to your future posts.

Jul 15, 2008 12:48 AM #1
Rainmaker
1,014,121
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Actually FAR's attorneys have told me that they have ZERO plans to put together any disclosures.  They say Realtors are exempt in their opinion, so why bother.  That gives me a lot of concern, but so far that is their position.

Jul 15, 2008 01:25 AM #2
Rainer
11,701
Cyd Weeks
Palmcoasting.com Real Estate Corp - Palm Coast, FL
Realtor Palm Coast, Fl

From what I understand, intent of the law often comes into play regardless of how it's actually written.   So, basically what has happened is that what a lot of us have been saying is being confirmed.   If you proceed ethically, you'll be fine.  

Thank you for the update and your persistance!

 

Jul 15, 2008 12:25 PM #3
Rainmaker
1,014,121
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Cyd - I wouldn't quite take it that far.  There are 2 punishments from this law.  One is the criminal part that the Attorney General would prosecute and the other is a civil fine of $15,000 that any lawyer could pursue and a liberal judge might allow it.  Just because you act ethically does not mean you aren't accidentally violating the law to the tune of 15K.

I do feel a lot more comfortable though as a Realtor.

Jul 16, 2008 08:47 AM #4
Anonymous
Brian

Any new updates or thought to this new law for great.  some parts are still unclear

Aug 15, 2008 04:46 AM #5
Rainmaker
1,014,121
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Brian - Actually I will be posting some updates on this.  Some more official opinions are out on this.  I also got to meet with the Florida Attorney General and our group is proposing some technical changes to the law to make it friendlier for Realtors and investors.

Aug 15, 2008 09:54 AM #6
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Rob Arnold

Metro Orlando Full Service - Investor Friendly & F
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