Frequently Asked Questions

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Legal Hotline FAQ

a blog of the most frequently asked questions to the MAR legal hotline.

In the Maryland Homeowners Association Act (HOA) (Title 11B, Section 106 (f)), it states that “the provisions of subsections (a), (b), (d), and (e) of this section do not apply to the sale of a lot in an action to foreclose a mortgage or deed of trust.”

I assume this means that if a bank institutes foreclosure proceedings, no HOA disclosure requirement is enforced. But does that also apply to a bank-owned property that the bank is selling as a result of acquiring the property in foreclosure? Is the bank exempt from providing HOA docs to the potential purchaser and that the 5-day right of rescission does not apply?

I list REO properties.

In many cases, I am contacted after the foreclosure sale, but before the sale is approved (ratified) by the court. Other times, I am informed that the seller has a deed, which is unrecorded. In this case, the tax records indicate the former owner is still the owner of record. This situation is very confusing to listing agents as well as buyers and buyer’s agents. What is my obligation concerning disclosure of the status of the title of an REO listing?

A licensed Illinois real estate broker has developed an interactive website that generates buyer and seller leads.

The company enters into a referral agreement with a licensed broker in Maryland to participate in the program. Upon a closing the company collects a referral fee paid from the Maryland broker to the Illinois broker per the referral agreement. The Illinois broker is not licensed in Maryland, are there any restrictions regarding payment of the referral fee from the Maryland broker to the Illinois broker?

I am a listing agent involved in a short sale transaction.

The lender has requested that I reduce my commission. The selling broker will not agree to accept less than what was advertised in MRIS. I included a comment in the remarks section that the commission was subject to lender approval. What happens if the selling broker refuses to take a commission that is less than what the listing broker offered in MRIS? Also, is it true that Fannie Mae servicers cannot condition the approval and closing of short sales on the willingness of the listing firm to alter its fee arrangement with the borrower as long as the total commission does not exceed 6%? Does this mean the mortgage company has to pay the fee if it’s less then 6%?