Department of Commerce Investigation/Enforcement

Since the D.O.C. started its investigation/enforcement actions against agents/joint ventures of First American Title Insurance Company, representatives of the Minnesota Association of REALTORS® (MNAR) have been in contact with D.O.C. representatives to seek clarity and express the concerns of our industry about these investigation/enforcement actions.

After considerable discussions with MNAR staff and MNAR Legal Counsel Don Smith, the D.O.C. has recognized the dilemma real estate agents are put in by executing a Civil Penalty Agreement confessing to wrongdoing to avoid greater D.O.C. sanctions when they believe they did not engage in wrongdoing. While the D.O.C. was of the opinion there are problems with the First American joint ventures, the D.O.C. recognized the potential adverse legal ramifications to an agent/joint venturer confessing to wrongdoing, and such ramifications were not intended by the D.O.C.

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MN REALTORS® Session Update

As the session evolves into Conference Committees, it is important to stay abreast for "Calls to Action." This is the time of the session where only a few legislators are involved in the final decision making process. Susan Dioury and Christine Berger have provided us with a detailed update on some of the bills they are tracking.

The State Budget

• The Minnesota Association of REALTORS® continues to take the position that the Minnesota Legislature needs to prioritize the spending needs of the state within the current revenue streams and to live within its means.
• The State of Minnesota will spend $53 Billion (all funds - Source: Department of Finance, Consolidated Fund Statement) on 5.2 million people or almost $10,000 per person living in the state. We believe these are sufficient resources for the Legislature to meet state needs. MNAR continues to oppose any tax increases.

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Minnesota REALTORS® Prepare for Washington DC Hill Visits

About 60 Minnesota REALTORS® will be spending time in Washington DC talking with our members of Congress. The event is part of the National Association of REALTORS® Mid-Year Conferences. The issues and a schedule of events will be mailed to each of the registered participants about week before the trip.

Minnesota REALTORS® Legal Update: SHORT SALES

By: Don Smith, Thomsen and Nybeck
Minnesota Association of REALTORS® Legal Counsel

QUESTION: What are the legal implications for listing agents when a "short sale" is involved?

ANSWER: By short sales, we mean sales of real estate where the net sales proceeds are less than the outstanding mortgage balance.

When taking a listing, the listing agent should be proactive in verifying the outstanding mortgage balance on the property by reviewing the mortgage statements or related documents. In addition listing agents should seek additional credit information on the seller such as the existence and balance on second mortgages, any judgments or tax liens against the seller that may encumber the property. These inquiries are all designed to determine if the likely sales proceeds are sufficient to pay off the seller's obligations plus the realtor fee and closing costs. If the net proceeds are insufficient, the realtor must either work with the seller to seek a discount on the mortgage or other debts affecting the property, determine if the seller is willing and able to bring cash to the closing or not take the listing.

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