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Yes. I am aware of the above.
"In Maine and NH, you must be a licensed mortgage originator to take personal information from a seller and correspond with their lender on their behalf regarding their short sale. If you are a Realtor, I believe you can give limited assistance, but the catch is that you cannot be paid a fee for your services in excess of your real estate commission."
I don't see where it states a Realtor cannot collect a fee for obtaining a mortgage payoff amount. If Realtors don't take a real estate commission, but collect a fee, I'm not seeing anywhere above that states it's prohibited. It prohibits Realtors from taking a payment from a Mortgage Broker "and do not receive compensation from an originator or mortgage broker or banker in connection with a mortgage."
What is interesting is 479:B outlines the terms in which someone can negotiate a short sale without a license.
I understand there is a fine line here, however obtaining a payoff amount is not negotiating a loan.
The UnSAFE Short Sale - 1 Although one might not think that this definition could conceivably apply to realtors, mortgage "originator" is defined broadly as including, among other things, any person who, for direct or indirect compensation or gain, "takes a mortgage application," "offers, negotiates, solicits, arranges, or finds a mortgage loan," or even merely "assists a consumer in obtaining or applying to obtain a mortgage loan."2 A person can therefore be deemed a mortgage loan originator, and thus be subject to the licensure requirement, if they, among other things, assist a consumer in negotiating a mortgage loan, collect information to assist a consumer in applying for a mortgage loan, or takes a mortgage application by receiving or recording a consumer’s information "in any form for use in a credit decision."3
1
RSA 397-A:3, I.2
RSA 397-A:1, XVII.3
RSA 397-A:1, XVII.At the same time, however, a person will not be deemed an originator if they perform "real estate brokerage activities," are licensed or registered in accordance with applicable state law to perform such activities, and do not receive compensation from an
originator or mortgage broker or banker in connection with a mortgage.
4 Real estate brokerage activities include, but are not necessarily limited to, the following:4
RSA 397-A:1, XVII(2).5
RSA 397-A:1, XX-b.1.) Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property;
2.) Bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;
3.) Negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease rental, or exchange of real property other than in connection with providing financing with respect to any such transaction;
4.) Engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; and
5.) Offering to engage in any of the following capacities.
5It is important to note once again that there has been little official guidance provided by New Hampshire state agencies on the precise bounds of the SAFE Act. Nevertheless, based upon the broadly worded statutory language, Realtors® must be careful when handling short sale transactions to not negotiate with the lender on the property owner’s behalf. NHAR does not believe the statute would prohibit a Realtor® from acting as a mere conduit for information between the property owner and the lender. Even so, Realtors® should be cautious to not complete any forms on behalf of the client lest they be interpreted as having "taken a mortgage application." Ultimately, it is recommended that NHAR members err on the side of caution in handling short sales until such time as more formal guidance is provided, particularly given the extremely aggressive approach that the New Hampshire Banking Department has adopted in enforcing the SAFE Act up until this point.
J:\WDOX\DOCS\CLIENTS\013931\079991\M1713510.DOC
Potential Ramifications of the SAFE Act on Realtor® Conduct in Short Sale Transactions
Smitty said:
NHAR has been closely monitoring and analyzing the potential implications of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the "SAFE Act") in short sale transactions. Although there is still an unfortunate lack of interpretive authority for this newly-adopted statute, it is clear that there are certain types of conduct that a Realtor® could engage in while representing a client in a short sale that would result in an inadvertent breach of the SAFE Act. Therefore, given that such a breach could result in significant penalties (including a monetary penalty of up to $25,000 for each violation), NHAR has prepared this bulletin in an effort to give members a brief overview of law applicable in this realm.
The SAFE Act was adopted by the United States Congress as part of the Housing and Economic Recovery Act of 2008. In essence, the SAFE Act required all states to ensure that they had a mortgage loan broker and originator licensing system that met certain minimum standards in place by August 1, 2009. A state that failed to adopt such a compliant system would have its regulatory authority taken over by the United States Department of Housing and Urban Development. Accordingly, on July 31, 2009, the New Hampshire statute governing the licensing of real estate mortgage brokers, bankers and originators, RSA 397-A, was substantially amended to bring New Hampshire’s licensing practices into compliance with the SAFE Act.
As codified, the New Hampshire version of the SAFE Act generally requires licensure of persons that make, broker or originate "mortgage loans secured by real property located in the state of New Hampshire, which is or shall be occupied in whole or in part as a place of residence by the borrower and which consists of not more than 4 living units."
KImberly, did this originally start out as an "option contract"? Not sure how a 3rd party can legally place a lien on the property in this way. I have seen them here in Florida where a party places an option contract on the property and then records a notice of option at the courthouse, essentially placing a lien on the property.
I agree with you, I really dont want to rely or trust a third party to handle my short sales, if I did more short sales I would hire my own in house person to work the files with me.
Kimberley Kelly said:
Hi Melanie,
Again, can you direct me to the law that states that please? I'd like to read both the NH and Maine versions.
Smitty said:
Melanie, I don't mean to sound confrontational, but can you cite me the law for NH that states you must be a mortgage originator? Because your statement is in direct conflict with law 479:B in New Hampshire. In NH, according to 479:B, you do not need to be licensed to negotiate a short sale. You DO need to jump through extra hoops if you are not a:
http://www.gencourt.state.nh.us/rsa/html/XLVIII/479-B/479-B-mrg.htm
(a) A duly licensed attorney at law acting on behalf of a client;
(b) A person who holds or is owed an obligation secured by a lien on any residence in foreclosure while the person performs services in connection with the obligation or lien, if the obligation or lien did not arise as a result of a pre-foreclosure conveyance;
(c) Any bank, trust company, savings and loan association, credit union, or insurance company chartered under the laws of any state or the United States or any subsidiary, affiliate, or agency thereof;
(d) A prejudgment or post-judgment lien creditor of the homeowner;
(e) A person licensed as a mortgage banker or mortgage broker while engaged in any activity for which the person is licensed under RSA 397-A;
(f) A person licensed as a real estate broker, associate real estate broker, or real estate salesperson, while engaged in any activity for which the person is licensed under RSA 331-A;
(g) A nonprofit organization or government entity that offers counseling or advice to homeowners in foreclosure or loan default, if the organization is not directly or indirectly related to and does not contract for services with for-profit lenders, foreclosure consultants, or pre-foreclosure purchasers; or
(h) A creditors' committee or trustee participating in a place of reorganization or repayment through a proceeding under the jurisdiction of the United States Bankruptcy Court.
http://www.gencourt.state.nh.us/rsa/html/XLVIII/479-B/479-B-mrg.htm
If there is a law in NH that states you must be a mortgage originator, it is in direct conflict with the above law.
Also, would you cite the law in Maine too. I'd like to read it. I'm assuming Realtors don't negotiate short sales in Maine?
@ Melanie - All short sale negotiators must be mortgage originators? Realtors are not exempt?
I think overall more lenders are opting NOT to allow 3rd party fees, but Fannie Mae allows a payment from the buyer for sure.
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