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Do Short Sale Negotiators Need A Real Estate License? What about a Law License?

California Business and Professions Code 10131 sets forth those activities that require a real estate license. Subsection (a) refers to selling and buying and negotiating the purchase or sale of real estate. Subsection (d) refers to negotiating loans or performing services for borrowers or lenders in connection with loans secured by real estate. If your real estate agent is using a third-party short sale negotiator, that negotiator is conducting licensed activity under either 10131(a) or (d). Thus, that person needs a valid, active real estate license in order to conduct those activities.

In the Fall 2008 Mortgage Loan Bulletin, the DRE explains on page 1: Unless otherwise exempt, a real estate license is required to solicit, market, or provide loan modification, SHORT SALE and other loss mitigation services that involve the negotiation or renegotiation of the terms of a loan or sale of a property. A real estate broker who pays a non-licensed short sale company that is performing licensed activity, or even a licensed company that is knowingly paying an unlicensed individual who is performing licensed activity, may be violating Business and Professions Code section 10137. Violations of 10137 may lead to the suspension or revocation of a real estate license.

The DRE goes on to state in the same Bulletin referenced above: Licensees have a duty to determine that the company is properly licensed (or has a bona fide exemption). The Department of Housing and Urban Development (HUD) has advised the DRE that referral fees paid or received in a loan modification transaction would constitute a violation of the Real Estate Settlement Procedures Act (RESPA). Although the statements are made in the context of a loan modification, there is no reason to believe the same approach would not apply to a short sale, which in fact also involves a modification (reduction) of the loan in the context of a sale. A short sale is also the settlement of the mortgage default. Therefore, the language included in the short sale approval is the equivalent of a legal settlement. Those terms can only be reviewed by a licensed attorney.

A real estate license is a bare minimum requirement, but it is far better and much more protective for homeowners to have an Attorney/Realtor® representing them in a short sale transaction. With Lawyers Realty Group, homeowners are assured full and complete protection of their interests throughout the short sale process to help them begin their financial recovery.

You Need A Skilled Realtor and Real Estate Attorney For Your Short Sale

In this tumultuous housing market, you need the services of a skilled Realtor® AND the expertise of a real estate attorney. You can have both and at no cost to you. I am a Realtor® and a practicing real estate attorney. For years, I was legal counsel to the nation’s largest banks. Now, let me give you the inside track on how you can limit your liability and achieve the best possible outcome for your situation.

Call today for a free consultation and get answers that only an attorney can provide:

  • What options do you have once you are in default and facing foreclosure?
  • Is a short sale better for you than a foreclosure?
  • What are the tax, credit and legal consequences?
  • Can the bank sue you for the unpaid balance of the loan after a foreclosure or short sale?
  • Can the IRS go after you if the lender agrees to waive the unpaid balance of your loan?
  • How does foreclosure/eviction work and how long does it take?
  • Can the lender kick you out once you are in default?
  • How does a foreclosure or short sale affect your credit?

Why use an Attorney/Realtor®?

All distressed real estate transactions are fraught with difficult legal issues. The short sale process in particular involves extensive adversarial negotiations and presents complex legal issues related to recourse liability, taxation and forgiveness of debt, foreclosure processing, and the terms and provisions of the settlement and releases of liability. Traditional real estate agents are forbidden by law from dispensing legal advice and therefore cannot offer you a complete understanding of the consequences of your decision. Make sure you are fully protected. Get the answers you need before making any decisions by contacting an Attorney/Realtor®.

What Is Lawyers Realty Group?

LAWYERS REALTY GROUP is an attorney owned and operated short sale brokerage. It was formed to help level the playing field between struggling homeowners and the bank lawyers who are threatening them with foreclosure, deficiency judgments and collection actions.

Traditional real estate agents are simply not trained to deal with the underhanded tactics used by the banks, and it is illegal for those agents to discuss or negotiate the legal and tax issues raised in a short sale. This leaves homeowners vulnerable and unprotected. By combining a real estate brokerage with the knowledge and skill of an experienced real estate attorney, Lawyers Realty Group is able to provide full protection for homeowners while charging all costs and fees to the bank.

Clients of Lawyers Realty Group receive free and comprehensive legal counseling, a full analysis of all options, and vigorous representation on both the legal and transactional sides of a short sale. We specialize in handling all aspects of short sale transactions, from listing and marketing homes to negotiating with the banks and commencing legal action when necessary. Lawyers Realty Group aggressively represents clients against the banks and maximizes every advantage for homeowners to help them begin their financial recovery.

Derik N. Lewis, Esq., is the founder and president of Lawyers Realty Group. Derik is a California real estate attorney and real estate broker. He graduated magna cum laude from Boston University School of Law and has 20 years of real estate experience. Derik served as legal counsel for some of the world’s largest lenders including Bank of America, Wells Fargo and JPMorgan Chase. Homeowners facing foreclosure or seeking a short sale can find help from a skilled real estate broker and experienced short sale attorney by contacting Lawyers Realty Group today.

What’s A Short Sale And Why Should I Choose It Over Foreclosure?

Hi, I’m Derik Lewis from Lawyer’s Realty Group. We’re located the Southern California area and are here to help you navigate the tumultuous real estate and short sale market. Today I’m discussing short sale transactions on your property.

A short sale is basically the sale of your property for an amount that doesn’t pay any outstanding mortgages or liens. That means you’ll need lender approval to do a short sale.

Many people ask why a lender would approve such a thing. If they don’t do a short sale, their other alternative is to foreclose on the property. If they foreclose, most of the time they are going to become the owner of the property and are responsible for maintaining it and paying all of the taxes and insurance, all in an effort to sell the property to a new buyer. If you are able to bring a buyer to the table and conclude a short sale that gets them as much as they would get after foreclosure, they are usually willing to cooperate and avoid the hassle.

People also wonder why an individual would want to short sell their home. One reason is that individuals get to avoid a public foreclosure and a public eviction process; you don’t want to see these on your credit. A short sale won’t have as much of an affect on your credit as foreclosure will and it will allow you to purchase a home again sooner than a foreclosure would. The number one reason that people usually do a short sale is to have the ability in that process to negotiate away deficiencies and liabilities from second lien holders, lines of credit and outstanding HOA fees. In a short sale you can negotiate and use the buyer’s funds to hopefully pay them off. If you go to foreclosure, a number of creditors will have the ability to sue you for the balances.

Take a look at our website where we have plenty of resources about traditional real estate and short sale transactions. As always, if you have any questions about short selling your home or you need assistance, please contact us at Lawyer’s Realty Group.

Bankruptcy Will Only Delay A Foreclosure

Hi, this is Derik Lewis with Lawyers Realty Group. We are here to help you with all of your real estate and short sale needs in this rocky Southern California housing market. I wanted to discuss a few things concerning bankruptcy because I’ve gotten quite a few inquiries this past week. One important thing to remember is that bankruptcy is not going to save you from foreclosure; if you are looking to stop the foreclosure on your home, you can always consider doing a short sale.

You can file a chapter 7 or chapter 13 bankruptcy claim; the U.S. Trustees website will break it down for you, but essentially a chapter 7 is a complete liquidation. A chapter 13 bankruptcy is a reorganization. You can notify all of your unsecured creditors that any amount you have over necessities in income will be allowed towards those creditors for the next 3-5 years. If you complete that plan, the rest is forgiven. Some people may make too much money to qualify for a chapter 7 bankruptcy, so they are forced into doing a chapter 13.

A lot of people have asked when they can file and how it may affect a foreclosure. If you are looking to postpone the foreclosure sale and protect assets and liability, you’ll want to file at least two business days before the foreclosure date.

Bankruptcy is not an alternative to foreclosure because the lender can ask to continue with the foreclosure; if you are looking for an alternative, you can always consider short selling your home. At Lawyers Realty Group, we work in coordination with the bankruptcy filing and we reach out to the lender as your lawyer and start discussing early on the opportunity for a short sale. This buys you extra time, but also gives you the benefit of not affecting your credit as much. If you would like more information about short selling your home, or are wondering if you qualify to short sell your home, please feel free to check out our website, email us or give us a call.