Mortgages
Q: An agent represent a seller whose lender just filed a foreclosure action. The seller believes that the lender has lost the note and will be unable to foreclose. If the lender has lost the note, does it mean the mortgage is unenforceable?
A: No. Although the note is the best evidence, it’s not the only evidence that the transaction was a mortgage arrangement. The courts have held that the absence of a note doesn’t make a mortgage unenforceable. The lender would have to file a lost instrument affidavit in the foreclosure proceedings.
Q: A buyer is in the middle of a divorce and is scheduled to close on a house before the divorce is final. She alone qualified for the financing, and she’s taking title in her name only. The lender is insisting that her soon-to-be-former husband sign the mortgage agreement. Why?
A: The mortgage agreement gives the lender the right to foreclose if the borrower defaults on the loan. However, a spouse who hasn’t signed the mortgage agreement may be able to assert homestead rights, making it difficult for the lender to foreclose. So, if property could be considered the buyer’s homestead, most lenders will require the non-owning spouse to sign the mortgage agreement for the sole purpose of waiving homestead rights. Therefore, it’s a good idea for the mortgage to include language stating that the spouse is signing only to satisfy the spousal joinder requirement contained in the Florida Constitution and that the spouse is not assuming any liability or obligations in the note or mortgage. In addition, the non-owning spouse should always review the mortgage agreement carefully to ensure the terms are consistent with his or her understanding.
Homeowners' Associations
Q: When a bank sends a request for an HOA to prepare an estoppel certificate in connection with a sale, may the HOA charge the client a fee?
A: Yes. Pursuant to Chapter 720.30851, Florida Statutes, the HOA may charge a fee. It must prepare the estoppel certificate within 15 days of the demand and may charge a fee for its preparation. However, the fee must be clearly marked on the certificate itself, and the authority to charge the fee should be established by a written resolution adopted by the association board or provided for by a written management, bookkeeping or maintenance contract.
Q: An amateur ham radio operator wants to erect an antenna in the back yard but many homeowners’ associations restrict an owner’s ability to install antennas on their own property. Is there a law that prohibits any restriction on the installation of antennas?
A: The telecommunications act of 1996 prohibits restrictions that impair the installation, maintenance or use of certain types of antennas. Not all antennas are covered by the act, however, and private communities are allowed to have restrictions that apply to amateur antennas such as ham or CB.
Federal Law
Q: What kinds of transactions are covered under the Real Estate Settlement Procedures Act (RESPA)?
A: Transactions that are covered are those involving a federally related mortgage loan, which includes most loans secured by a lien (first or subordinate position) on residential property. These include home purchase loans, refinances, lender-approved assumptions, property improvement loans, equity lines of credit and reverse mortgages.
Q: What types of transactions are generally not covered under RESPA?
A: The following are not covered: an all-cash sale, a sale where the individual home seller takes back the mortgage, a rental property transaction or other business purpose transaction.
Q: May a mortgage banker and a real estate broker advertise their services together, for example, on the same brochure or newspaper advertisement?
A: Nothing in RESPA prevents joint advertising. However, each party should pay pro rata share of the cost to avoid a RESPA violation.
Q: A broker wants to call businesses to see if they’re interested in selling. Do the federal Do Not Call laws or regulations apply to businesses?
A: No. The Do Not Call Registry is only for residential telephone numbers.
Q: RESPA (the Real Estate Settlement Procedures Act) requires a lender, as well as mortgage brokers in some instances, to provide a “Good Faith Estimate” to all applicants for a federally related mortgage loan. Do the charges appearing on the Good Faith Estimate have to be exact?
A: No. Under RESPA, the Good Faith Estimate must include the amount of or range of charges for settlement services the borrower is likely to incur in connection with the settlement. Each estimate must be made in good faith and bear a reasonable relationship to the charge a borrower is likely to be required to pay at or before settlement.
Q: Does the federal do-not-call legislation apply to door-to-door solicitations? A: No. However, agents may still be prohibited from making door-to-door solicitations if there is a community, municipal or county restriction on door-to-door solicitations or if there is a posted No Trespassing sign on the property or the community.