The
legal issues getting the most buzz in real estate circles
these days are:
| 1. |
The
risk of identity theft.
A 2007 study by Javelin Strategy & Research found
that the average identity theft victim lost $5,720
to fraud. Access to clients’ confidential information
makes brokers attractive targets for identity theft.
To protect yourself, institute document management
policies for both paper and electronic files. NAR
has partnered with the Federal Trade Commission to
develop brochures and other educational materials
on protecting against identity theft, available at
the Government Affairs section of REALTOR.org. |
| |
|
| 2. |
Sham
affiliated business arrangements.
As a recent crackdown against real estate licensees
and title company agents in Minnesota demonstrates,
both state-level law enforcement and HUD are ready
to play hardball against affiliated business arrangements
that function only as shells for illegal kickbacks.
Review NAR’s advice in The Letter of the Law section
of REALTOR.org. |
| |
|
| 3. |
Outlawing
rebates and incentives.
While the dozen or so state laws that prohibit real
estate practitioners from paying incentives to consumers
aren’t new, the recent focus on the legality of such
statutes by the U.S. Department of Justice in states
such as Kentucky have put this marketing practice
under the microscope. Read more about the issue at
REALTOR.org. |
| |
|
| 4. |
Disclosure
obligations when a seller faces financial woes.
As declining home prices make short sales more common,
the issue of how, when, and how much real estate professionals
must disclose to other brokers and prospective buyers
is getting a lot of attention. Do you have to tell
cooperating brokers that they run the risk of a bank
cutting the offered commission in the MLS? Will doing
so breach your duty to a seller? NAR’s Short Sales
Issues Work Group plans to have policy recommendations
by summer, so stay tuned. |
| |
|
| 5. |
The
persistence of mortgage fraud.
Current price instability in many local real estate
markets provides an easier opening for fraud and makes
it more challenging for appraisers to assess value.
Brokers and sales associates who are eager to close
deals and help pressured sellers may be tempted to
turn a blind eye to one price on the HUD1 statement
and another on the check. More recent fraud schemes
include both foreclosure experts who take the title
to the home without satisfying the loan and those
who offer fraudulent reverse mortgages to hard-pressed
seniors. Remember that even if you don’t profit and
you’re only trying to help, it’s still fraud. |
BY
NAR Legal Department
Real
Estate Vocabulary Builder:
Good faith estimate
An estimate of closing costs that must be given with residential
loans on one to four units under the Real Estate Settlement
Procedures Act by a lender to a mortgage applicant within
three days after the loan application based on the lender's
best estimate. Example: Gwen applied for a mortgage loan
on a duplex. Within three days the mortgage banker sent
a good faith estimate of closing costs including points;
origination fees, title, and legal expenses.
Grandfather
clause
A provision in the law that occurs when a law is changed
or passed where a specific activity that was legal under
the previous law is allowed to continue.
Please check out our website at www.coakleyrealty.com
If you would like to suggest a topic for comment in one
of our future emailers, please let me know. You can always
reach me at rory@coakleyrealty.com
or by phone 240-696-6634. I look forward to hearing from
you!
Rory
S. Coakley
Coakley Realty, Inc.
20 Courthouse Square - Suite 106
Rockville, MD 20850
