IN THIS ISSUE
Mortgage Rescue Scams: Top 10 Warning Signs
Agency Disclosure: First Face-to-Face Meeting
Staff Spotlight: William F. Reynolds
Coming Soon: New RESPA Regulations
FYI: Property Management
PSI Continues as Exam Contractor
It Pays to Renew on Time!
Contract Identification Reminder
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IT PAYS TO RENEW ON TIME!
If you fail to renew your license on time, you must be prepared to pay the reinstatement/late fee before you can renew. This is clearly spelled out in §17–314(g)(4). Originally, the fee was $100, but increased to $150 on March 1, 2009 when a new fee schedule was implemented. This fee is non-negotiable; however, please note that in highly extenuating circumstances (i.e., death or hospitalization) it may be waived at the Commission’s discretion. The Commission will mail a 60-day reminder notice to your office. If you still haven’t renewed, a 3-day reminder will be emailed, so make sure we have your
current email address! You can easily renew online 24/7. This is a matter of professional conduct: it is a violation of the Real Estate Brokers’ Act to conduct real estate transactions without a license! Save yourself the expensive consequences, and be sure to renew on time.
CONTRACT IDENTIFICATION REMINDER
No licensee is permitted to draft contracts or listing agreements in the name of another licensee. For example, a firm’s licensed assistant may not prepare a contract in the name of a licensed salesperson if the salesperson does not give consent. This is a matter of following disclosure laws: if a licensed assistant prepares a contract in the name of another licensee, that licensee is legally responsible for a contract with which he or she may not even be involved. (Note that unlicensed assistants may draw up contracts under the supervision of a licensee and supervising broker.) If, however, both a licensed assistant and salesperson are involved with a transaction, it would be appropriate for both names to appear on the contract. Failure to comply with this regulation could lead to disciplinary action by the Commission. Thanks for helping us protect the consumers of Maryland.
Stanley J. Botts, Commissioner, Occupational and Professional Licensing
Harry Loleas, Deputy Commissioner, Occupational and Professional Licensing
Katherine F. Connelly, Executive Director
Steven Long, Assistant Executive Director
Patricia Hannon, Education Administrator
Charlene Faison, Licensing Supervisor
Jennifer Grimes, Investigator
Celestine Hall, Reception/Education
Brenda Iman, Paralegal
Darchelle Lanteon, Licensing
Jack Mull, Investigator
Robert J. Oliver, Investigator
William F. Reynolds, Investigator
Lucinda Rezek, Paralegal
Patrick Richardson, Auditor
Charlotte Streat-Thornton, Complaints & Education
John West, Complaint Intake Administrator
Shannon Davis, Outreach Coordinator
John Nicholas D'Ambrosia, Chair, Industry Member, Charles County
Anne Cooke, Vice Chair, Industry Member, Cecil County
Nancy R. Simpers, Industry Member, Cecil County
Marla Johnson, Industry Member, Frederick County
Surina A. Jordan, Consumer Member, Baltimore City
Robin Pirtle, Consumer Member, Montgomery County
Georgiana S. Tyler, Industry Member, Baltimore City
Colette P. Youngblood, Consumer Member, Prince George's County
MESSAGE FROM THE EXECUTIVE DIRECTOR
Thanks for joining us for the Fall issue of The Commission Check. You’ll find a friendly reminder about the importance of renewing your license on time. Make sure the Commission has your current email address so you don’t miss renewal notifications. We give you a look at a great list of tips to help avoid mortgage rescue fraud—please share them with your clients. The Commission has also taken a close look at agency disclosure regulations, and we’ve done our best to summarize our findings for you. And we can’t forget upcoming RESPA changes that take effect in January. Finally, we’re pleased to introduce Bill Reynolds, one of our valued team of investigators. Is there anything we missed? Let me know at firstname.lastname@example.org. Happy holidays!
MORTGAGE RESCUE SCAMS: TOP 10 WARNING SIGNS
Consumers and agents, take note! The U.S. Department of the Treasury has issued a consumer advisory detailing common mortgage modification scams. It pays to be aware of fraudulent tactics that con artists may use to lure distressed homeowners into their trap.
- “Pay us $1,000, and we’ll save your home.” No legitimate counselor will require you to pay such a large sum before they do any work for you.
- “I guarantee I will save your home – trust me.” Unrealistic promises are a key tip-off that an arrangement may not be legitimate.
- “Sign over your home, and we’ll let you stay in it.” This is a dangerous proposition: signing over your home gives another person the power to sell the house or evict you, and you’ll still be liable for the mortgage.
- “Stop paying your mortgage.” Never stop paying your mortgage unless you have contacted your mortgage lender directly!
- “If your lender calls, don’t talk to them.” You should keep in close touch with your lender, as their understanding of your situation is crucial to a satisfactory resolution.
- “Your lender never had the legal authority to make a loan.” False arguments like this are meant to convince you that you are not obligated to pay your mortgage. Don’t fall for them!
- “Just sign this now; we’ll fill in the blanks later.” Never sign anything you haven’t read in detail and clearly understood, and don’t let anyone pressure you into signing.
- “Call 1-800-Fed-Loan.” It’s easy to make a scam look like part of a legitimate government program. Call your lender to see if you qualify for federal assistance—which does not require you to pay high fees.
- “File for bankruptcy and keep your home.” Bankruptcy only stops the foreclosure process temporarily. Stop paying your mortgage, and your lender will eventually foreclose upon your home.
- “Why haven’t you replied to our offer? Do you want to live on the streets?” High-pressure tactics are a sure sign of shady business practices. Legitimate foreclosure counselors never treat a client in such a way.
Familiarizing yourself with these scams can save you and your clients time, money, and heartache. The
entire advisory is available, and as a downloadable
Adobe Acrobat for free).
AGENCY DISCLOSURE: FIRST FACE-TO-FACE MEETING
It’s important to maintain transparency in all your real estate transactions, especially when it comes to agency. According to §17–530:
(b) (1) A licensee who participates in a residential real estate transaction as a seller’s agent, buyer’s agent, or as a cooperating agent shall disclose in writing that the licensee represents the seller or lessor or the buyer or lessee.
(2) The disclosure shall occur not later than the first scheduled face-to-face contact with the seller or lessor or the buyer or lessee.
Any licensee who participates in a real estate deal as a seller’s agent, buyer’s agent, or cooperating agent must disclose in writing that he or she represents his or her client. This is ensured by the presentation of the Agency Disclosure form,
“Understanding Whom Real Estate Agents Represent”, at your first face-to-face meeting with the seller/lessor or buyer/lessee. Consider the following situations:
- You are a buyer’s agent showing a property to your client at a scheduled appointment. If the seller (or seller’s agent) is present at the showing, you must provide him or her with a copy of the Agency Disclosure form.
- You are a buyer’s agent attending an open house with your client. Since there is no face-to-face meeting scheduled, you are not obligated to present the seller or seller’s agent with the Agency Disclosure form. However, if your client expresses interest in the property during the open house, you must provide the Agency Disclosure form to the seller or the seller’s agent at that time.
- You are a seller’s agent at an open house. A prospective buyer starts to look around, but does not ask any questions or engage you in conversation. At this point, you do not need to provide the Agency Disclosure form. If the potential buyer begins to ask questions or disclose possibly confidential information, however, you must then provide him or her with the form before continuing the discussion.
The focal point of the three above scenarios is the first scheduled face-to-face interaction and/or the moment interest is expressed in a transaction. If you have further questions about agency disclosure, feel free to email email@example.com.
STAFF SPOTLIGHT: WILLIAM F. REYNOLDS
Bill Reynolds joined the MREC as an investigator in October of 2006. As one of the team of investigators, Bill carries a load of 20 cases at all times. Prior to that, he spent 28 years with the Maryland State Police, where he conducted and supervised criminal and covert investigations as well as intelligence operations. He was part of a team that developed and established the Maryland State Police’s Intelligence Analytical Section and served as Maryland’s representative to Interpol. Bill holds a BA in Sociology from Loyola College in Maryland. He has been very instrumental in helping the Commission reduce the amount of time for a complaint case to be investigated. He is committed to serving the consumers of Maryland. Bill lives in Harford County with his wife. They love spending time with their grown son, daughter-in-law, and three grandkids. Each year they all take a holiday trip to Disney World—then Bill and his wife head to Sanibel Island, Florida to recover.
Coming Soon: New RESPA Regulations
As you may have heard, new, standardized HUD-1 and Good Faith Estimate (GFE) forms will be mandatory on January 1, 2010. The new HUD-1 form is designed to add transparency to the settlement process, which will hopefully encourage consumer buying. The GFE, which all lenders and mortgage brokers must provide to consumers, clarifies loan terms and settlement costs and has been shortened for ease of use. The U.S. Department of Housing and Urban Development hopes that these new regulations will protect consumers from predatory lending practices and ensure them the most affordable mortgage. For more information and downloadable copies of the forms, visit HUD’s RESPA page.
FYI: Property Management
There are licensees who also offer property management services. Although §17–301(b)(4) states, “A license is not required for an agent of a licensed real estate broker or of an owner of real estate while managing or leasing that real estate for the real estate broker or owner,” be advised that you must still comply with real estate licensing law. If you perform property management services, you must conduct all dealings with the same level of responsibility that you would real estate brokerage transactions. Remember that if you offer property management services through your broker, then you need your broker’s permission to use your brokerage name, address, office forms, or any other related items that link you to the broker’s business. Your broker is responsible for your actions, so this is of the utmost importance. Your broker, however, is not responsible for your actions if you offer property management services outside of the brokerage. Security deposits and other related monies must be promptly placed in escrow with a federally insured financial institution. Be aware, however, that the Guaranty Fund is available to consumers on all of your property management transactions. This also applies to unlicensed property managers operating under the broker. All agreements must be in writing and signed by all parties. In short, conduct your property management services in an ethical manner befitting the real estate profession. If you violate any part of the licensing law, the Commission may impose disciplinary sanctions.
PSI Continues as Exam Contractor
We’re pleased to announce that PSI will continue as the Commission’s exam services provider. PSI has provided this valuable service for the last 15 years, and this new contract ensures that our partnership will reach the 20-year mark. We’re also happy to report that the exam fee has decreased from $78 to $66, effective March 2010. PSI has five convenient locations: Baltimore, College Park, Salisbury, Lanham, and Hagerstown. View the