Short Sales Clarification - Foreclosure Fraud Act:

A Message from Danielle Blake, Vice President of Government Affairs Realtor Association of Gerater Miami and the Beaches

"We have received several calls at the board regarding a circulating e-mail warning Realtors® of the new Foreclosure Fraud Act that went into effect on Oct. 1, 2008.  Does this prevent agents from participating in short sale real estate transactions?
 
Recently enacted HB 643 is a legislative response to the tremendous amounts of foreclosure fraud that Florida homeowners are currently experiencing. The law prohibits a person from performing mortgage related rescue services (defined as any good or service promising assistance in connection with stopping, avoiding, or delaying foreclosure proceedings concerning residential real property, or curing a default or failure to timely pay with respect to a residential mortgage loan obligation") without first executing a written agreement. The bill also prohibits a person from charging or collecting a fee before the completion of all service contained in the agreement. Persons who perform these services are called "foreclosure-rescue consultants," but the new law provides a narrow exemption for real estate licensees and appraisers who are performing acts that are subject to disciplinary action by the Florida Real Estate Commission or the Florida Real Estate Appraisal Board.  
 
It is FAR's belief that a person licensed and performing real estate related duties under Part I of chapter 475 would NOT be considered a "foreclosure-rescue consultant" and could perform short sale transactional related services. 
 
HOWEVER, if a licensee is charging a fee, or cooperating with a loss mitigation entity that is charging a fee for "foreclosure-related rescue services" including loan modifications, the provisions contained in the new law may apply to the licensee.  These licensees should proceed as if they were a foreclosure-rescue consultant under Chapter No. 2008-79, which can be downloaded at .... 
FAR's Office of Public Policy will be meeting with the Attorney General's office this week to clarify this new law.  "