Banks and consumers continue to do battle over the housing crisis, with consumers wanting reprieve on loan modifications and home foreclosures.
Banks, lenders and servicers are stepping up efforts to re-review documents behind foreclosures, including the sale of foreclosure properties to buyers and investors in all states.
So what does the foreclosure document issue have to do with real estate broker and agents?
While the document issue is currently with the banks, lawyers and others looking to bring lawsuits could potentially start requesting documents from real estate brokers and agents regarding the sale of foreclosure properties.
In response to our recent inquiry of real estate attorneys regarding the current problems with real estate documents, a number of the comments included:
We could start to see attorneys asking brokers and agents about sales disclosures for foreclosed homes.
Real estate brokers and agents are at the very front of the home selling process, including selling foreclosed homes. They handle a number of documents, and are require to make certain disclosures.
Lawyers handling real estate foreclosure litigation are looking at all angles to help win reprieve and compensation for their clients. It was lawyers who started the process of “missing documents” to win against banks that were foreclosing on their clients.
The goal is to be prepared. Current real estate regulations already require real estate brokers and agents to have a paper trail. And now is the time to make sure your documents are in order.
Get These Documents In Order
A number of attorneys indicated that when documents are requested, they are looking for anything that may be incomplete, inaccurate, and/or in contradiction.
While each state varies as to the specific document requirements, attorneys agree that you should at least have the following documents in place:
– Document Retention Policy: your company should have a written policy and procedure regarding document retention. This policy should mirror your state’s (Department of Real Estate) policy.
– Executed Contract: be sure to have a signed copy of the actual contract for every foreclosure and short sale.
– Addendum: any agreed upon changes made after the signing of the contract should have been in writing.
– HUD-1: make sure this statement is complete and accurate
– Disclosures: make sure all disclosure statements are signed and dated, including making sure the borrower acknowledges receipt of the disclosures by signing and dating the forms as well.
Now is the time to make sure all documents are in place and easily accessible. As real estate brokers and agents, part of your regulatory requirements consists of making sure you have all paperwork from each sales. And while this sound fundamental, make sure that your documents are signed and dated.