According to guidelines recently published by the Maryland Real Estate Commission on July 22, 2013, real estate agents are acting outside the scope of their license when negotiating short sales with mortgage lenders. The Commission specifically stated that “since the scope of the real estate license is limited by definition to assisting clients in the purchase, sale or lease of real property, the Real Estate Commission and the Commissioner of Financial Regulation consider that negotiation of a short-sale deficiency agreement or any other type of mortgage collection forbearance with a seller’s mortgage lender or servicer falls outside of the scope of a real estate license.”
Agents may still market and list a house for short sale, but should not act as a representative of the seller in discussions between the seller and the lender, to fall within the protection of their license and E&O policy. Agents are now required to inform sellers that the seller must either personally negotiate with the lender or hire a Mortgage Assistance Relief Service Provider or a Maryland attorney (such as Suren G. Adams, Adams Law Office, LLC) to conduct the negotiations. The full guidelines can be found by clicking here: MD Real Estate Commission Short-Sale Guidelines.
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