State Specific Rules and Regs for Mitigation

[Mitsu O'Riley]

Hey fellow mitigators,

I wanted to share the rules and regs (as I understand them) for mitigating since I expect it is different across the country.

In Florida, You can't charge an upfront fee for mitigation etc...
Also, you can't have your clients (SELLERS) think you are a foreclosure rescue company (in any way). These are the biggest parts that effect mitigators, and investors in dealing with Short Sales. Other parts of the Florida Statute (FS) dictate that an agent cannot be paid for mitigation, only a commission, unless they are not involved in the transaction (I believe). A mortgage broker can collect a broker fee for mitigation, at closing.
Also, as far as I can tell, a title company cannot do mitigation. They can have all parties send them the docs for the shortsale package, fax it in, ask lender for status, and receive approval/denial to pass along. The insurance commission restricts what part a title insurance company can have in the mitigation. From my understanding, if all they are doing is faxing and status calls, then they are fine. I can't see how someone can be successful in mitigation if they can't negotiate or discuss the particulars of a deal with the lender.

So, bottom line, in Florida, I can charge a fee paid at closing by buyer, seller, agents, and/or have the lender pay my fee.

I am not an attorney, and doing my business according to what is outlined above.
I want to find out about rules and regs for mitigation in other states, or a reference to a closing agent in your state that can help me find out and stay legal.
Thanks,
Mitsu :wink: