The Gateway to Education, Information and Technology

Legal

 

Antitrust

Do Not Call/Telemarketing

  • Guidance on Do-Not-Fax, Call or Email
    President Bush signed the Junk Fax Prevention Act into law on July 9. The law, effective immediately, establishes an exception for existing business relationships in excising federal laws governing fax communications. For more details on the new law's requirements, Click Here. Also note that senders must comply with both federal and state fax laws. The federal law will not allow an unsolicited fax to be sent where doing so is prohibited by state law. For compliance advice, CONTACT: Finley Maxson, 312/329-8381. For info on the legislative history or regulatory outlook, CONTACT: Marcia Salkin, 202/383-1092, or Lynn King, 202/383-1156.
  • FCC FSBO Memo
  • Federal Update to Federal Political Coordinators
    Fax Prevention Act, following the Senate’s approval of the bill last Friday, thus clearing it for the President’s signature immediately. 
    What does this mean for REALTORS®?
    REALTORS® will not have to get written permission from customers with whom they have an established business relationship before faxing property listings or other information to them.
    REALTORS® can continue to send such faxes to their established customers as long as they provide an option for those customers to discontinue receipt of such faxes if they so choose. This does NOT allow unsolicited faxes or advertisements to potential new clients – the existing relationship must be proven.


Fair Housing

  • Cultural attitudes, practices and communication
  • Humanitarian Award Application
  • Protected Classes
  • Section 8 - Visit HUD's page: http://www.hud.gov/section8.cfm
  • HUD fair housing brochure (includes disabilities) Fair Housing Postcard
  • Evanston Fair Housing Brochure (warning you must hand out the official paper brochure to be in compliance with the law)
  • Wilmette Fair Housing Brochure
  • Fair Housing Accessibility
  • Fair Housing and here is even more
  • Skokie Fair Housing Ordinance
  • Evanston Landlord Tenant Laws
  • Human Realtions Brochure
  • HUD Advertising Guidelines
  • NAR's Guide to Fair Housing
  • NAR's Field Guide to Business Etiquette When Working With Other Cultures
  • Visit www.thehousingsite.org, a new fair housing Web site developed by the Illinois Association of REALTORS and the Partnership for HomeOwnership. Available in English (and soon in Spanish), the site is useful for real estate professionals, lenders, renters, landlords homebuyers, sellers, insurers and appraisers. The site was designed to eliminate the need to search multiple sites for fair housing information, and it provides a broad range of information related to fair housing.
  • The National Association of REALTORS ® is committed to the provision of equal housing opportunities. The Prospect Equal Service Report is designed to incorporate basic prospect information, needs and wants, properties shown, and a record of service provided. This report will help you keep uniform records for all prospects. The form is not a checklist of service to be
    provided; the level and type of service you provide will be determined by you firm and should be consistent.
  • Fair Housing & Antitrust packet - Results of NFHA's 2005 Trends Report & Why Complaints Are Being Filed Across the County Now
  • Your Everything Housing Source - Why should you bookmark www.thehousingsite.org? Because the site was designed to keep real estate professionals, their clients and rental property tenants on the same page regarding state and federal fair housing laws. "Often clients will interpret the laws and regulations according to how they would like them to be. At The Housing Site, the laws and regulations regarding fair housing are they are in black and white. Refer them to the Web site so that everyone has the same information," says Beth Llewellyn, CEO of the Partnership for HomeOwnership, which developed The Housing Site for the Illinois Association of REALTORS®. Landlords, too, will benefit from the extensive section on landlord tenant laws. Says Llewellyn: "If you’re going to evict somebody, there are certain procedures you need to follow and give notice as dictated by local ordinance and state law. It’s so much easier when everyone has access to the same information." To compile the extensive resources on the site, Llewellyn worked directly with state and federal local housing entities. The site, available in English and Spanish, serves buyers and sellers, real estate professionals, lenders, renters, landlords, insurers and appraisers. Fair housing laws are designed to protect the rights of each home seeker to equal opportunity in the purchase, sale, rental, leasing, financing, insuring and advertising of housing. The seven protected classes covered under the Fair Housing Amendments Act of 1988 are race, color, national origin, religion, sex, disability and familial status. State and local governments may have additional protected categories in their laws. Title III of the Americans with Disabilities Act prohibits discrimination against persons with disabilities in places of public accommodations and commercial facilities. In Illinois, sexual orientation was added to the state list of protected classes in January 2005. "These are legal issues," says Llewellyn. "We hope REALTORS® will use the site as a tool for every aspect of their business: their marketing efforts, dealing with applicants face-to-face, when they are showing properties. We are in a litigious society. You have to be very careful about what you say and how you present your properties."
    Mar. 2006 Illinois REALTOR magazine

Lending Laws

  • RESPA - HUD'S GUIDELINES: WHEN A MORTGAGE COMPANY MAY PAY A FEE TO A THIRD PARTY FOR LOAN ORIGINATION WORK WITHOUT VIOLATING RESPA. For more info regarding RESPA click here.
  • Patriot Act - or why all the paper work?
  • Educate yourself on mortgage fraud. With reports of mortgage fraud on the rise all over the country, real estate practitioners must be on guard for this white-collar crime and go out of their way to make sure they aren't involved in a fraudulent deal. In Blanche Evans' column at REALTOR Magazine Online, get tips on how to spot and report fraud schemes. Also see the Illinois Fair Housing Initiative for predatory lending resources. Remember, if a deal seems too good to be true, it probably is. Here are some precautions:
    • Get referrals. Encourage clients to get referrals from mortgage professionals and to check the licenses of industry professionals with state regulators.
    • Look out for unusual promises. Be wary of unsolicited contacts and high-pressure sales tactics. A promise of extraordinary profit in a short period signals a problem.
    • Verify the value. Check out recent comparable sales of property in the area where you are buying, and other documents, such as tax assessments, to make sure the value of the property is not inflated.
    • Seek out title history. Review the title history to determine if the property has been sold multiple times within a short period, which could indicate that values were falsely inflated.
    • Know the loan terms. Understand terms of your mortgage and check that information against information in other loan documents.
    • Protect your signature. Never sign loan documents that contain blanks.
  • Real Numbers Mortgage fraud increases five-fold in the last decade. by Steve Bochenek, IAR Legal Counsel
     There have been a number of recent articles concerning the increase in mortgage fraud. Realty Times, in an article published March 31, 2004, reported that mortgage fraud had increased five-fold in the last decade (Early Detection of Mortgage Fraud, Sichelman). Real estate brokers and salespeople are on the front line of real estate transactions and as a result may sometimes find themselves in a potential situation involving mortgage fraud. Participation in such activities could well result in loss of your right to engage in the real estate brokerage business.
    Mortgage fraud can occur in a number of ways. Some of these are loan application fraud, exaggerated appraisals, false income reports, and inflating purchase prices. It is the latter of these that a real estate broker or salesperson might most commonly see in their brokerage business.
    An example commonly written about is one in which the buyer does not have enough cash for the down payment on a home. The property may be priced at $80,000 when the buyer and seller first agree on a contract. However, it turns out that the buyer is not able to obtain financing because the buyer does not have the money for the down payment.
    An individual or entity involved in the transaction may make a suggestion that there is a way to make the transaction work. The suggestion is made that the way to make this transaction work is to inflate the purchase price to $100,000 with the seller agreeing to give the buyer a credit of $20,000 at or immediately following the closing. In essence, there is a seller-financed second mortgage cancelled immediately after closing. Now the buyer applies for an 80 percent loan on a $100,000 purchase, thus appearing to have 20 percent or $20,000 in equity. Buyer is approved for the financing and the transaction closes. At closing the seller gives a credit or forgives the additional $20,000 of purchase price. The seller is in the same position the seller would have been in when the purchase price was $80,000 and the buyer owns the home.
    Do you think this sounds too good to be true? Well, you are right. It is too good to be true because it involves mortgage fraud. The real estate broker or salesperson can be intertwined in this mortgage fraud in several ways. The most common ways might be by a request to change the price of the property in the listing agreement or the purchase price in the contract. This request might even come from your client or the loan originator. However, that is no protection for the real estate broker or salesperson who engages in these practices.
    The real estate broker or salesperson who participates in inflating the purchase price by changing the listing price or the purchase price in the contract is a participant in the mortgage fraud and is jeopardizing their livelihood. Not only are there federal laws against mortgage fraud, such as RESPA, the Illinois Real Estate License Act of 2000 ("Act") also contains provisions which are violated by such activities. Section 20-20 of the Act contains provisions for which licensees can be disciplined.
    These include "making any substantial misrepresentation" (Section 20-20 (h) (1)), "pursuing a continued and flagrant course of misrepresentation" (Section 20-20 (h) (3) "engaging in dishonorable, unethical or unprofessional conduct of a character likely to deceive, defraud, or harm the public" (Section 20-20 (h) (12), and "any other conduct, whether of the same or a different character from that specified in this Section, that constitutes dishonest dealing" (Section 20-20 (h) (16). Intentionally inflating the listing price in a listing or the purchase price in a purchase contract to justify mortgage financing that will allow the transaction to close on the original terms could be a violation of any one or all of these provisions and subject the licensee to a potential fine of up to $25,000 and loss of license.
    In addition to discipline under the Act, the licensee may also face a potential civil suit from the buyer in the transaction. At first glance, it may not be obvious how the buyer is damaged since they purchase the property they wanted to buy. However, the buyer now has no equity in the property and if there is a default in loan payments the lender may not work with the buyer to save the loan.
    In addition, real estate taxes may be higher then they should be because of the inflated purchase price, thus increasing the carrying cost of the house to the buyer. One other problem may be a tax issue as to whether the seller "forgiving" the $20,000 second "phantom" mortgage in our example constitutes income to the buyer.
    The example used in this article is just one of a variety of ways in which mortgage fraud may be attempted. The bottom line is that the real estate broker or salesperson does not want to be involved in any such fraud for a variety of reasons, including possible loss of license. This is not to say that there is a problem with legitimate seller concessions in a purchase contract. However, the key is that they are legitimate and not a phantom arrangement for the mere purpose of obtaining mortgage financing.
  • 12/06/05 Recently there has been tremendous concern over the growing crime of mortgage fraud. You will be pleased to know that the Lake County Recorder’s office, along with the Lake County State’s Attorney’s office , has been ahead of the curve regarding these schemes. I’m happy to share with you the many checks and balances that have been in place for nearly two years. In February 2004, the Recorder’s office partnered with the office of Michael Waller, Lake County State’s Attorney and their Special Investigator Lou Archbold. Lou serves on several crime task forces throughout the state and has given hundreds of local presentations on Identity Theft. After evaluating our business practices, Lou offered several suggestions that were implemented in the Recorder’s office. The following are a few of those procedures.
    • The Lake County Recorder’s staff attended Identity Theft seminars. These seminars provided vital information to our counter staff. Employees were trained on the “red flags” and key items to identify when accepting deeds for recordation.
    • Beginning with Quit Claim deeds executed in January 2005, the Lake County Recorder’s office became the first office in the state to send postcards notifying homeowners that the title to their home was transferred. To date, nearly 6000 postcards have been generated and the response from grateful homeowners has been very rewarding.
    • An additional step was also added. Whenever possible, once a Quit Claim deed is recorded, our staff will personally telephone the Grantor/homeowner to confirm that they intended to convey their property. We believe the postcard serves a valid purpose, but by the time the postcard is generated, mailed and received by the homeowner, it’s too late, as the crime has already been committed. Patterns show that the “bad guys” come in person to the Recorder’s offices to record their fraudulent Quit Claim deeds. They do not use the mail or a Title Company because it would simply take too long. The criminal wants to swiftly record the deed, leave the building with a certified copy of the recorded deed, head directly to their financial institution, acquire their loan within 24-48 hours and leave town. By the time a postcard reaches the Grantor/homeowner, the thief has fled with the money. Our telephone calls have been warmly received.
    • In May 2005, the Lake County Sheriff’s department installed cameras in the Recorder’s office. These cameras are aimed at the cashier and the entrance to our office. Signs are also posted notifying customers that a surveillance camera is in operation. Any criminal who wants to record a fraudulent deed will know he is now on film!We are very proud of the business practices that we have put in place in Lake County, but more needs to be done to protect homeowners. One critical safeguard requires legislation, and that’s where you could help. We are seeking legislation to require that all signatures on a deed be notarized. Notaries are licensed by the state to certify signatures on legal documents, to prevent fraud and forgery, and to act as official witnesses when people sign legal papers. Requiring signatures be notarized, particularly on a Quit Claim deed, would be a huge deterrent to the criminal. Please ask your legislators to consider sponsoring and passing such a law. As always, my staff and I continue to work diligently to protect Lake County homeowners. Our goal is to provide outstanding public service and we hope you feel we are serving you well. If your group or association would like a presentation on this topic, I would be happy to add your group to my schedule. Please feel free to call me directly at 847-377-2575. Sincerely, Mary Ellen Vanderventer Lake County Recorder

Financing

  • Secretary's Designation of Pilot AreasThe Pilot Program Area is the geogaphic area situated within the following zip codes as designated by the United States Postal Service on January 27, 2006: 60620: 60621. 60623: 60628: 60629, 60632. 60636, 60638. 60643. and 60652.

Misc

Taxes

Toxic

  • Safety tips regarding meth. The Illinois State Police provides the following tips for meth safety. Find more resources regarding meth at the Illinois Attorney General's Web site Meth Net. Find more resources in Illinois REALTOR magazine's online only features.
    • Keep your distance from a suspected lab, as they can explode from the volatile chemicals that are mixed to produce the drug.
    • If you find trash with items typical in a meth lab (e.g., antifreeze containers, lantern fuel cans, drain cleaner, starter fluid, clear glass containers), do not attempt to dispose of it yourself. Call your local law enforcement agency or the Illinois State Police, 1-217-782-6637.
    • If you suspect someone is a user, approach them cautiously as users fall into a pattern of abuse that results in a "tweaking" stage (coming down from the high). This stage is the most dangerous, as users become anxious, nervous, and distraught because they cannot achieve a high from methamphetamine.
  • NAR Mold Working Group Report- Click below to read the Working Group Report, which provides an excellent summary of the major issues surrounding mold. The paper provides an overview of such topics as mold basics, the health issues raised by mold, the disclosure issues facing real estate licensees, and the insurance issues facing homeowners. The Report also contains the ten recommendations of the Working Group, as adopted by NAR's Board of Directors. These ten recommendations represent NAR's current mold strategy, and include such things as amending NAR's policy on Property Condition Disclosure, working to create laws to protect members acting in good faith from mold lawsuits, creating a consumer-oriented brochure describing mold, and the continued tracking of mold issues by NAR.

Unauthorized Practice of Law