SRCAR Connect

There are currently 8 candidates for the 2012 Board of Director election. On Tuesday, June 28, 2011 these candidates had the opportunity to tell the membership why they would like to be a part of the SRCAR Board of Directors. This is what they had to say:

Gayle Batchelor
Prudential California

Frank Galante
Century 21 Wright

Sandy Husein
American National Real Estate

Aaron Lloyd
Canear Real Estate

Mike Mason
Mason Real Estate

Sue Moriki
Keller Williams Realty

Walter Wilson, Incumbent
Coldwell Banker Residential

Dane Wunderlich, Incumbent
Realty World & Associates

The MLS Rules are periodically revised to stay current with changes in technology, market condition, and member conduct. N.A.R. has approved a revised set of MLS Rules, which will become effective on May 1, 2011. The full set of revised MLS Rules will be posted to the Association’s website in a redlined format. A more detailed memorandum has also been prepared. This short memorandum summarizes the approved changes that all Participants and Subscribers (“Users”) should be aware of. It is imperative that each member thoroughly reviews all of the Rules and the detailed memorandum with an emphasis on the revisions.

• Wherever the Rules required 48 hours to take action (inputting a listing and notification of listing changes, such as price changes, status changes, and sold status), 2 business days is now required.
• Minimum orientation of MLS Rules and of the MLS System is now required. The MLS may require additional training of up to 4 hours in any 12 month period.
• The “note” in MLS Rule 4.1 states that possession of a broker’s license is not sufficient to qualify for MLS participation. Users must actively endeavor to list real property and/or accept offers of cooperation and compensation. “Actively” means continual and on-going. This requirement does not preclude a User that conducts business on a part time, or seasonal basis. No minimum number of transactions are required in a good faith effort. This requirement does not permit MLS to deny participation based on the level of service provided by the User or potential User as long as the level of service satisfies state law.This requirement does not permit an MLS to deny participation for a User that operates a Virtual Office Website (“VOW”) [See Rule No.19]. An MLS may only evaluate a User if the MLS has a reasonable basis to believe that the User is in fact not actively endeavoring and this requirement shall be applied without discrimination.
• MLS Rule 4.10 added – Users may have to complete additional training of up to 4 hours in any 12 month period when deemed necessary by the MLS to be familiarized with updates. Users given opportunity to complete such training remotely.
• MLS Rule 7.2 added – One listing per property type per property allowed on MLS. When multiple Users believe they have a valid listing agreement for the same property, the Users and seller, not MLS, must resolve before listing on MLS. Listing on MLS without a valid listing agreement violates MLS Rules. Failure to remove a listing from the MLS after cancelation/expiration is a violation of MLS Rules.
• MLS Rule 7.3 added – Only listings of Users are accepted by MLS. Inclusion of a co-listing broker/agent who is not a User in the MLS is prohibited.
• MLS Rule 7.4 added – If a listing is Range Price Listing, Listing User must use a valid range. The default List Price shall be the high end of the range and the low end of the range must be at least 85% of the high end unless ranges are filed with the DRE. If so, filed ranges shall be used in all Range Price listings.
• MLS Rule 7.9 renumbered to MLS Rule 7.12, adding a sentence that states listing broker’s obligation to report a withdrawal from the MLS after seller’s consent as well as sales price is not relieved if escrow closes while seller is represented by listing broker.
• MLS Rule 7.15 changed to MLS Rule 7.18 modified – reductions from commissions offered for short sale negotiator fees or other administrative costs are not allowed. Reductions from commissions to the listing broker’s initial offer cannot be a condition of an offer.
• MLS Rule 9.2 – Requires Listing Brokers, in response to inquiries from Buyers or cooperating Brokers, to disclose existence of offers on property and whether they were obtained by the listing licensee or by another within the licensee’s firm or otherwise. A modification to Rule 9.2 modifies this requirement stating: “…only if asked.”
• MLS Rule 10.2 – states listings not inputted into the MLS due to seller’s instructions shall be input into the MLS “sold” data by listing Broker. Added: listings on MLS that were withdrawn must still be reported if seller represented by listing Broker when sale closes.
• Rule 11.5 revised – Photos submitted to MLS are warranted by the User that the User has the authority and grants the MLS the right to reproduce/display the photos in accordance with MLS rules and regulations. Later listings of photographs require prior written authorization from originating User/other appropriate party. Additional photographic representations including but not limited to branding information or images displaying “for sale” signs on the property is prohibited. One image depicting the exterior of the listed property must be posted within 5 days of submission to MLS except for Lots and Land unless seller refuses.
• MLS Rule 12.5 revised – Public remarks can only relate to the marketing, description and condition of the property. No contact information is allowed (names, phone or fax numbers, email or website addresses, virtual tours and transaction tracking URLs). No showinginstruction is allowed (lockbox, alarm, gate or other security codes). No occupancy information is allowed (statement that property delivered vacant not a violation). No information regarding compensation or bonuses for cooperating brokers is allowed.
• MLS Rule 12.16.8 added – Users cannot use IDX listings for anything other than display on websites. Users are not required to prevent indexing of IDX listings by search engines.
• MLS Rule 12.16.10 added – No information from MLS database shall be distributed except as provided for in these rules and/or in the National Association of REALTORS IDX policy.
• MLS Rule 12.16.14 added – Any IDX site that allows third-parties to write comments or reviews about listings, links to comments or reviews, or displays/links to an automated estimate of the market value of the listing, shall disable or discontinue those features at the request of the seller. The listing broker/agent will tell the MLS that seller elected to not have one or both of these features on websites. Subject to section 12.16.15, a User’s IDX site may communicate professional judgment concerning a listing and/or that a feature was disabled per seller’s request.
• MLS Rule 12.16.15 added – Users must have a means (e-mail address, telephone number, etc.) to receive comments about accuracy of information added beyond that supplied by the MLS that relates to a property displayed on an IDX site. Users will correct or remove any false information upon notice by the listing party, explaining why the data or information is false. Users need not remove or correct any information that reflects a good faith opinion.
• MLS Rule 12.21 added – The N.A.R. Code of Ethics requirement that a REALTOR® provide services in a competent manner is now also in local MLS Rule 12.21. Additionally, it states that MLS Users will not provide professional services outside their competency unless they seek help from someone competent or these facts are disclosed to client. Identification of the competent person and their contribution will be disclosed to client.
• MLS Rule 13.6 added – All lockboxes used on residential property in California (1-4 Units) in the CARETS system, must be electronic and accessible by a key from a CARETS member. Multiple lockboxes may be used as long as one meets the criteria above.”

There is no substitute for a careful review of the entirety of the MLS Rules. With the growth ofCARETS and the regional MLS, it is essential that each Broker and Agent understand their responsibilities as well as their rights in order to protect themselves, their clients, and other real estate professional. As information becomes available to the Association, we will continue to provide updates. Please review the Association’s website regularly for additional information regarding rule enforcement, fines, and other changes that will be taking place.

Click here for the report.

By: Sylvia J. Simmons

The residential mortgage crisis in California created a business opportunity for “foreclosure consultants” to offer assistance to distressed homeowners in evaluating their options regarding their home mortgages and negotiating modifications with their lenders.  Many providers of such loan modification services (LM Services) are honest, hardworking real estate professionals who provide a valuable service to consumers.  Unfortunately, however, some providers are unethical or even criminal and either provide no valuable services or engage in scamming activities such as charging high fees without providing any real services or obtaining deeds of trust to “save” the home.  Homeowners in distress were finding it increasingly impossible to distinguish between legitimate LM Service providers and the “bad guys.”

In the Spring of 2009, the California Legislature stepped in to protect vulnerable homeowners and imposed various restrictions on providers of LM Services which cannot be waived, such as:

• Requiring agreements for LM Services to be in writing and contain specific disclosures;
• Prohibiting collection of a fee for any services until after the services were fully performed;
• Providing homeowners with a right to rescind the LM Services agreement under certain circumstances.

The California Department of Real Estate (DRE) required that all real estate professionals engaged in LM Services submit any advanced fee agreement regarding LM Services for review and issuance of a “no objection” letter.

Some companies restructured their LM Services into specific groupings or phases (such as evaluation, gathering documentation, submitting proposal, negotiating agreement with lender) so that service fees could be collected upon completion of each phase of specified services.  Some companies established separate accounting procedures for placing fee “retainers” into a trust account to be distributed with a verified accounting to the client upon completion of the LM Services.  Some companies established procedures to treat client costs deposits as separate from fees for LM Services and to deposit costs monies into a trust account to be drawn against periodically upon providing the client with a verified accounting.

Additional restrictions on providers of LM Services were passed in the Fall of 2009.  When Senate Bill 94 (SB94) took effect on October 11, 2009, companies that provide LM Services had to make some quick adjustments to stay in business.  The new law (Civil Code Section 2944.7(a)(1)) prohibited LM Service providers (except attorneys) from collecting advance fees by making it “unlawful for any person who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower, to do any of the following: (1) Claim, demand, charge, collect, or receive any compensation until after the person has fully performed each and every service the person contracted to perform or represented that he or she would perform.” The prohibition applies only to mortgages and deeds of trust secured by residential real property containing four or fewer dwelling units.  The good intentions of the Legislature resulted in legitimate companies going out of business while scammers continued to take advantage of distressed homeowners in new ways for similar fees. For example, charging $1,500 to $3,500 or more to provide a “forensic loan audit” or create a “document package” for the borrower himself to present to the lender.

Real estate brokers providing LM Services now must assume the entire risk of a lender’s refusal to modify a loan.  LM Service providers front the cost of ongoing business operational expenses and advances on behalf of clients for costs related to LM Services (such as copying charges, long distance telephone charges, courier services, postage). They must also refund fees collected after October 11, 2009, even if the agreement was entered into before SB94 took effect.  Another problem arises when lenders pursue foreclosure at the same time they claim to be working with the borrower on a loan modification.  Obviously, if the property forecloses, the LM Service provider will not be reimbursed for costs advanced or paid for services rendered.

Both the Department of Real Estate and the California Bar Association have determined the receipt of any monies in advance or providing phased services violates California law.  The DRE is no longer reviewing agreements or issuing “no objection” letters and takes the position that absolutely no monies, no matter what the nature or how or when received, maintained, or distributed, may be requested or accepted until all the LM Services are fully completed.  This applies to LM Service agreements existing before October 11, 2009 — no further fees may be collected and any fees received after October 11, 2009 must be fully refunded; however, advanced fees paid before October 11, 2009 are not affected.  The restrictions are not limited by residency or place of employment, and therefore apply to California borrowers being offered LM Services by an out-of-state provider, or a California provider offering LM Services to a resident of another state.

Adding another blow to legitimate LM Service providers, the Federal Trade Commission (FTC) has thrown its hat into the ring with Title 16 – Code of Federal Regulations, Part 322, Mortgage Assistance Relief Services (“MARS”).  The new federal rules meant to protect consumers from fraudulent LM Service and foreclosure rescue providers were finalized in late November 2010 and contain a complete ban on advance fees that will go into effect on January 31, 2011.  The FTC rules are much more strict than California law.  Attorneys are basically exempt because they can charge a client a retainer in advance for services related to the application for a loan modification, if they meet state law requirements.  Generally, the FTC rules prohibit for-profit LM Service providers (i.e. mortgage brokers) from collecting any advance fees at all until the lender or loan servicer has given the homeowners a written offer and the homeowners have accepted the offer.  The fine for failing to comply is $11,000 a day!  Clearly illegal operations will not be tolerated and the FTC intends to enforce the rules.

Feedback from attorneys and real estate professionals reveals that an impossible standard has been established.  The new rules essentially “throw the baby out with the bath water” by requiring legitimate LM Service providers to finance the costs and provide the services for months or even years without any payment.  They also run an extremely high risk of never being paid or even recovering actual costs.  However, the good news is that the FTC Rules create a clear and bright line that will hopefully eliminate scams and fraud.

In summary, real estate brokers engaged in LM Services need to immediately come into compliance with California law and plan now to be in compliance with the FTC rules before the end of January 2011.

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Sign up for the Broker Involvement Program today!

It’s easy to be a broker leader as part of C.A.R.’s Government Affairs Team.

Everyday in California, brokers manage their offices and mentor their agents. That’s how great client service is taught — by example.

C.A.R.’s Government Affairs Team needs brokers to become part of the team by helping agents become activists so that your industry can stay strong. If you don’t lead, your business will suffer.

• Protect the Mortgage Interest Deduction.
• Stop the three percent independent contractor withholding and the expansion of the sales tax to services.
• Defeat point-of-sale mandates and transfer taxes.

These issues are critical, and if brokers lead, REALTORS® will act to protect your ability to serve clients and sell real estate.

Give five minutes to protect your business. When a broker’s help is needed, C.A.R. staff will contact you by email or phone. All you need to do is email your agents asking them to look for a Red Alert email from C.A.R., or leave a firm-wide voice mail for agents asking them to respond. NAR staff will follow up with you directly to add your office to their broker involvement program.

To sign up for C.A.R.’s Broker Involvement program, please email DeAnn Kerr atdeannk@car.org and ask to be added to the program.

To sign up for NAR’s program, click on the following link and then click on the “Join the Program” button on the left: http://www.realtoractioncenter.com/realtors/brokers/

If you have any questions about either program, please contact DeAnn Kerr atdeannk@car.org.

An enormous breakthrough in how REALTORS® can more effectively lobby their Federal and State lawmakers through greater participation in Calls for Action (CFAs). NARs Broker Involvement Program provides you with a quick and simple tool to rally your agents. Through the Broker Program, NAR discovered that when Broker Owners alert their agents to key issues, agents listen and take action.

Together we have the opportunity to bring a strong and united REALTOR® voice to members of Congress on issues of concern to the REALTOR® community and your real estate business.

Read more

We had the great pleasure to have four of our local City Managers stop by the new SRCAR office on Monday, September 13th for our Realtor Action Fund Breakfast. In this meeting, the City Managers addressed some of our members with updates of their city.

Attached are the presentations from each of the cities:

Menifee – Steve Harding (9.5MB)

Murrieta – Rick Dudley (21.6MB)

Temecula – Shawn Nelson (11.4MB)

Wildomar – Frand Oviedo (54.2MB)

Our Government Affairs Director, Gene Wunderlich was there and has written a great article about the RAF breakfast which can be seen on the SRCAR GAD Blog.