Saturday, June 16, 2007
Florida - Practicing law without a license
What is the unlicensed practice of law?
The unlicensed practice of law, in its simplest terms, is when someone who is not licensed or otherwise authorized to practice law in Florida practices law. In determining whether the giving advice and counsel and the performance of services in legal matters constitute the practice of law, it is safe to follow the rule that if giving such advice and performance of services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the persons giving such advice possess legal skill and knowledge of the law greater than that possessed by the average citizen, then the giving of such advice and performance of services by one for another constitutes the practice of law.
California - Practicing Law without a license
Threat Level -- Wired Blogs
Above the second link from google when you query "practicing law without a license".
Here is case law that was cited in the blog article:
From the 9th Circuit Court of Appeals.
" The software did, indeed, go far beyond providing clerical services. It determined where (particularly, in which schedule) to place information provided by the debtor, selected exemptions for the debtor and supplied relevant legal citations. Providing such personalized guidance has been held to constitute the practice of law.
(...)
(The) system touted its offering of legal advice and projected an aura of expertise concerning bankruptcy petitions; and, in that context, it offered personalized -- albeit automated -- counsel. ... We find that because this was the conduct of a non-attorney, it constituted the unauthorized practice of law."
Above the second link from google when you query "practicing law without a license".
Here is case law that was cited in the blog article:
From the 9th Circuit Court of Appeals.
" The software did, indeed, go far beyond providing clerical services. It determined where (particularly, in which schedule) to place information provided by the debtor, selected exemptions for the debtor and supplied relevant legal citations. Providing such personalized guidance has been held to constitute the practice of law.
(...)
(The) system touted its offering of legal advice and projected an aura of expertise concerning bankruptcy petitions; and, in that context, it offered personalized -- albeit automated -- counsel. ... We find that because this was the conduct of a non-attorney, it constituted the unauthorized practice of law."
What constitutes practicing law without a license.
Legal Ethics: What constitutes as practicing law without a license.
For my own sake I wanted to read what constitutes practicing law without a license. When I queried "practicing law without a license" The above link was Google's first organic return. I quote the most important part below.
A legal ethicist an M.A. and a J.D. stated: "It is my opinion as an ethicist who is well versed in legal ethics nationally that even preparing some documentation would constitute practicing law if you provide analsysis (sic) in how to answer or fill in the form.
For my own sake I wanted to read what constitutes practicing law without a license. When I queried "practicing law without a license" The above link was Google's first organic return. I quote the most important part below.
A legal ethicist an M.A. and a J.D. stated: "It is my opinion as an ethicist who is well versed in legal ethics nationally that even preparing some documentation would constitute practicing law if you provide analsysis (sic) in how to answer or fill in the form.
Realtor Org - Helping Realtors practice law?
I read this in an article from Realtor.org.
Question
What financial or credit liabilities will a seller have as a result of a short sale?
"Many lenders ask sellers to sign a promissory note for all or part of the difference between the proceeds of the short sale and the debt obligation as a condition to a short sale. In such cases, the note gives lenders the right to sue a seller and attach other assets if the note is not paid when due.
It’s particularly important to understand this distinction if you work in states such as California that have a nonrecourse mortgage, says Churchill. In such states, the lender cannot pursue a deficiency judgment against a seller for any deficiencies after a property is foreclosed. Because of this distinction, sellers who are already in default on a mortgage and do not have the resources to pay off a separate promissory note after a short sale might be better off letting the lender foreclose, he says. If you are working in a state in which mortgage loans are nonrecourse, be sure and alert your seller-clients to this distinction."
Technically, in specific situations Churchill's advice could be sound and he brings up an important consideration. However, the article seems to neglect myraid exceptions to the rule which could be important; depending on the facts. A California attorney would have to consider whether the loan is a refinance or a purchase money loan, whether a sold out junior is involved. A California attorney then might weigh the possibility of a judicial foreclosure. Just by writing the above I almost feel compelled to include a disclaimer such as - All situations are different, laws vary in each jurisdiction. Before making any decisions you may wish to consult with an attorney licensed to practice in your state.
The above is just small concern. Mr. Churchill says he is an attorney so I suspect his advice was excerpted from his full material.
However, this brings up a major issue. Should Realtors be trained to advise their "clients" on the subjects of accepting foreclosures and signing promissory notes? Should Realtors or loss mitigation "specialists" be trained to request homeowners sign releases which are used to represent to the bank that the Realtor or "Specialist" represents the homeowner.
Should banks even honor those releases? Frankly, I see this whole area of law becoming full employment for Plaintiff's attorneys.
I have said before we all know Realtors practice law. Some Realtors do it very well. But, we are now in a down market. Mistakes no longer get covered up by higher resale values. Unhappy former homeowners and plaintiff's attorneys will be out looking for pockets of money.
After the last real estate downturn in California one of my first trials saw the wife of a Real Estate agent suing my client, a mortgage broker, for conspiring with an appraiser to inflate the worth of a property. My client the mortgage broker had already been sued a few times. He represented he had no assets left. The plaintiff was looking for a "fraud" judgment so she could make a claim against the state fund for victims of fraud. I am sure we all know what being sued for fraud does to a man looking to keep his license.
I am a Realtor and an Attorney. There is no substitute for smart, informed Realtors. In these illiquid markets, Realtors are a necessary and essential part of the pricing and marketing of short sale properties. I humbly suggest we protect the public and allow lawyers to practice law and Realtors to price market and sell Real Estate.
Question
What financial or credit liabilities will a seller have as a result of a short sale?
"Many lenders ask sellers to sign a promissory note for all or part of the difference between the proceeds of the short sale and the debt obligation as a condition to a short sale. In such cases, the note gives lenders the right to sue a seller and attach other assets if the note is not paid when due.
It’s particularly important to understand this distinction if you work in states such as California that have a nonrecourse mortgage, says Churchill. In such states, the lender cannot pursue a deficiency judgment against a seller for any deficiencies after a property is foreclosed. Because of this distinction, sellers who are already in default on a mortgage and do not have the resources to pay off a separate promissory note after a short sale might be better off letting the lender foreclose, he says. If you are working in a state in which mortgage loans are nonrecourse, be sure and alert your seller-clients to this distinction."
Technically, in specific situations Churchill's advice could be sound and he brings up an important consideration. However, the article seems to neglect myraid exceptions to the rule which could be important; depending on the facts. A California attorney would have to consider whether the loan is a refinance or a purchase money loan, whether a sold out junior is involved. A California attorney then might weigh the possibility of a judicial foreclosure. Just by writing the above I almost feel compelled to include a disclaimer such as - All situations are different, laws vary in each jurisdiction. Before making any decisions you may wish to consult with an attorney licensed to practice in your state.
The above is just small concern. Mr. Churchill says he is an attorney so I suspect his advice was excerpted from his full material.
However, this brings up a major issue. Should Realtors be trained to advise their "clients" on the subjects of accepting foreclosures and signing promissory notes? Should Realtors or loss mitigation "specialists" be trained to request homeowners sign releases which are used to represent to the bank that the Realtor or "Specialist" represents the homeowner.
Should banks even honor those releases? Frankly, I see this whole area of law becoming full employment for Plaintiff's attorneys.
I have said before we all know Realtors practice law. Some Realtors do it very well. But, we are now in a down market. Mistakes no longer get covered up by higher resale values. Unhappy former homeowners and plaintiff's attorneys will be out looking for pockets of money.
After the last real estate downturn in California one of my first trials saw the wife of a Real Estate agent suing my client, a mortgage broker, for conspiring with an appraiser to inflate the worth of a property. My client the mortgage broker had already been sued a few times. He represented he had no assets left. The plaintiff was looking for a "fraud" judgment so she could make a claim against the state fund for victims of fraud. I am sure we all know what being sued for fraud does to a man looking to keep his license.
I am a Realtor and an Attorney. There is no substitute for smart, informed Realtors. In these illiquid markets, Realtors are a necessary and essential part of the pricing and marketing of short sale properties. I humbly suggest we protect the public and allow lawyers to practice law and Realtors to price market and sell Real Estate.
Short Sale instead of foreclosure?
Over the last six months there has been a change in the attitudes of the Lenders. They have become significantly more open to short sales.
Country wide had hired 60 people into its loss mitigation department.
Before you agree to doing a short sale make sure you are doing it for the right reasons. I know many Realtors are suggesting that a short sale saves your credit. Currently the benefit may be negligible and soon it may be wiped out. The fico score people are currently considering making a short sale as damaging to your credit as a foreclosure. There are many reasons to consider a short sale. But a short sale should probably not be your opening Gambit with the bank.
Given the right circumstances there are better offers which may also help you with the IRS loan cancellation bill. The Realtor in me sees a short sale as the way to earn the most money. But, the lawyer in me knows that a short sale is one of a host of options which should be considered.
Another thing to consider in markets like San Diego, Bradenton and Sarasota is that home can be on the market for a long time without so much as getting a showing.
My experience shows the great homes in great locations can be sold without too much price cutting but that homes on less than ideal lots or in less than ideal condition become very price sensitive.
Country wide had hired 60 people into its loss mitigation department.
Before you agree to doing a short sale make sure you are doing it for the right reasons. I know many Realtors are suggesting that a short sale saves your credit. Currently the benefit may be negligible and soon it may be wiped out. The fico score people are currently considering making a short sale as damaging to your credit as a foreclosure. There are many reasons to consider a short sale. But a short sale should probably not be your opening Gambit with the bank.
Given the right circumstances there are better offers which may also help you with the IRS loan cancellation bill. The Realtor in me sees a short sale as the way to earn the most money. But, the lawyer in me knows that a short sale is one of a host of options which should be considered.
Another thing to consider in markets like San Diego, Bradenton and Sarasota is that home can be on the market for a long time without so much as getting a showing.
My experience shows the great homes in great locations can be sold without too much price cutting but that homes on less than ideal lots or in less than ideal condition become very price sensitive.
Short sale and foreclosure misinformation
There is a great deal of misinformation about short sales and foreclosures on the net. I see the same potentially negligent information on websites from Florida real estate agents, Arizona real estate agents and California real estate agents.
I suspect the information comes from the same trainers. I frequently see these agents hold themselves out as "certified specialists" trained by a top real estate trainer or loss mitigation specialist.
Lets review the misinformation which I have seen come up in geographically limited searches like short sale florida, short sales san diego, short sales california, short sale bradenton and short sale sarasota.
Misleading statements:
1. There must be a hardship such as a lost job or a health concern for a bank to consider a short sale.
Response: Absolutely wrong. I have a bank considering a short sale right now. I reserved the right to submit appropriately limited financials later if necessary. I expressed my concern to the loss mitigator that this is a business transaction. While being cordial and circumspect, I let the bank know that in a falling market sentiment about hardship may be an inappropriate consideration. (for clients with assets.) Hint: the right statement in the beginning of the negotiation may minimize or eliminate any potential deficiency judgment or debt forgiveness tax claim by the IRS. (Contact me me if you would like to know why.)
2. Short sales cost the homeowner nothing.
Response: Not really, short sales do cost the homeowner his/her credit rating and the homeowner may lose use of the property which he or she could have had for a few extra months. Overall this statement does not seem that harmful.
3. Save your credit with a short sale.
Response: Right now dubious, soon to be incorrect.
4. You have to have a buyer before you can approach the bank with a short sale.
Response: Wrong, this is contrary to one of our proprietary strategies designed to get a property sold and avoid or minimize loan forgiveness.
5. A homeowner can authorize this Realtor to negotiate with the bank because she is certified specialist.
Response: This borders if not crosses the line of practicing law without a license. Actually as I think about it - it must be practicing law without a license. I welcome contrary opinions. I would love to hear from others on this issue.
6. To accomplish the short sale you should give the bank the financial information they request.
Response: Wrong, dangerous, practicing law without a license and very harmful to clients with assets. This has been discussed in a few places on this blog.
7. Then I see Realtors advising homeowners on bankruptcy options. Lawyers are afraid to give advice on the net. We always have disclaimers. Yet we see Realtors telling homeowners not to file for bankruptcy while letting the Realtor conduct short sale negotiations. Can you imagine how much these Realtors' Brokers are going to pay out to people who could have filed bankruptcy but did not because Realtors provided faulty legal advice and foreclosure services. Think about how many people a plaintiff's firm could get in a class action a year from now.
8. I have heard and read Realtors say a short sale is either going to lead to a deficiency judgment or a taxable event as loan forgiveness.
Response: Maybe not. I think you would have to be a educated as a lawyer and trained as a Realtor to understand why. If you spend time to thinking about Fair market value and what statements you might make to the bank to get the clock ticking, you might significantly minimize or eliminate a homeowners liability to the bank and the IRS. For now I do not feel comfortable publishing my thoughts on this subject because it is only my legal opinion, I have not yet negotiated with the IRS on this issue.
I offer to help the first person who contacts me with a large loan forgiveness tax bill from the IRS - for free - or at a very discounted rate.
I suspect the information comes from the same trainers. I frequently see these agents hold themselves out as "certified specialists" trained by a top real estate trainer or loss mitigation specialist.
Lets review the misinformation which I have seen come up in geographically limited searches like short sale florida, short sales san diego, short sales california, short sale bradenton and short sale sarasota.
Misleading statements:
1. There must be a hardship such as a lost job or a health concern for a bank to consider a short sale.
Response: Absolutely wrong. I have a bank considering a short sale right now. I reserved the right to submit appropriately limited financials later if necessary. I expressed my concern to the loss mitigator that this is a business transaction. While being cordial and circumspect, I let the bank know that in a falling market sentiment about hardship may be an inappropriate consideration. (for clients with assets.) Hint: the right statement in the beginning of the negotiation may minimize or eliminate any potential deficiency judgment or debt forgiveness tax claim by the IRS. (Contact me me if you would like to know why.)
2. Short sales cost the homeowner nothing.
Response: Not really, short sales do cost the homeowner his/her credit rating and the homeowner may lose use of the property which he or she could have had for a few extra months. Overall this statement does not seem that harmful.
3. Save your credit with a short sale.
Response: Right now dubious, soon to be incorrect.
4. You have to have a buyer before you can approach the bank with a short sale.
Response: Wrong, this is contrary to one of our proprietary strategies designed to get a property sold and avoid or minimize loan forgiveness.
5. A homeowner can authorize this Realtor to negotiate with the bank because she is certified specialist.
Response: This borders if not crosses the line of practicing law without a license. Actually as I think about it - it must be practicing law without a license. I welcome contrary opinions. I would love to hear from others on this issue.
6. To accomplish the short sale you should give the bank the financial information they request.
Response: Wrong, dangerous, practicing law without a license and very harmful to clients with assets. This has been discussed in a few places on this blog.
7. Then I see Realtors advising homeowners on bankruptcy options. Lawyers are afraid to give advice on the net. We always have disclaimers. Yet we see Realtors telling homeowners not to file for bankruptcy while letting the Realtor conduct short sale negotiations. Can you imagine how much these Realtors' Brokers are going to pay out to people who could have filed bankruptcy but did not because Realtors provided faulty legal advice and foreclosure services. Think about how many people a plaintiff's firm could get in a class action a year from now.
8. I have heard and read Realtors say a short sale is either going to lead to a deficiency judgment or a taxable event as loan forgiveness.
Response: Maybe not. I think you would have to be a educated as a lawyer and trained as a Realtor to understand why. If you spend time to thinking about Fair market value and what statements you might make to the bank to get the clock ticking, you might significantly minimize or eliminate a homeowners liability to the bank and the IRS. For now I do not feel comfortable publishing my thoughts on this subject because it is only my legal opinion, I have not yet negotiated with the IRS on this issue.
I offer to help the first person who contacts me with a large loan forgiveness tax bill from the IRS - for free - or at a very discounted rate.
Friday, June 15, 2007
SignOnSanDiego.com > News > Business -- Harvard: Housing slump to continue into 2008
SignOnSanDiego.com > News > Business -- Harvard: Housing slump to continue into 2008
Harvard Study said housing slump likely to continue into 2008. Study cites the subprime adjustible rate mortgages.
The article cited a professor from the university of San Diego as well.
Harvard Study said housing slump likely to continue into 2008. Study cites the subprime adjustible rate mortgages.
The article cited a professor from the university of San Diego as well.
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