A new rule created by the FTC to protect Idaho homeowners from mortgage debt relief scams may have an impact on real estate professionals helping clients with short sales.
In a nutshell the rule bans all upfront fees for renegotiating mortgage terms and mandates some disclosures are made to consumers if a short sale is negotiated with a lender for Idaho homeowners or when advertising short sale experience.
Companies or real estate agents advertising help with short sales are now required to include the following:
You might notice that it’s prominently displayed in the footer on every page of this website and on many others. Does it change the way I do Idaho short sales? Nope, I’ve never charged my short sale clients and upfront fee. While some real estate agents resorted to practice, I abstained. And while it’s only my opinion, I don’t see any reason to take money from a homeowner who’s already in a bad way.
So other than having a few more disclosures for my clients to sign, it is business as usual for me. Some Realtors® may have to adjust their current practices to comply and I would caution you as I do all my clients to run the opposite direction of anyone charging upfront fees.
Despite the rule taking effect January 31, 2001, it still hasn’t stopped the scammers calling with to sell you on their “foreclosure rescue” wares. It is in this regard that I offer this last little piece of advice. Don’t get sucked into a scam by anyone calling and asking for an upfront fee. Even if they claim to be an attorney, accountant, or guaranteed success (When’s the last time you actually got your money back from anyone offering a 100% money back guarantee?). It’s funny how the ones that offer something like that are always the most difficult to get to stand behind their word.
A little common sense goes a long way and I’m all for my clients getting tax and legal advice, however, the attorney cold calling you from California is probably not your best bet. What are some of the scams you’ve seen? Let’s see if we can help some good people avoid a bad situation.
