loan modifications

New HOA Fees Law Effective December 31, 2011

Under this new Arizona real estate law HOAs may charge a homeowner no more than $400.00 as a fee for preparing documents related to the disclosures an HOA must deliver during the sale of a home. Additionally, the HOA may not collect this fee earlier than the close of escrow and may only charge the fee once to a homeowner for a transaction. A.R.S.§ 33-1260 (C, D); A.R.S.§ 33-1806 (C, D); SB1149.

There has been some confusion regarding whether this new law applies to transfer fees charged by an HOA on the sale of a home. Transfer fees can be thousands of dollars, and are frequently a percentage of the sales price of the home. Transfer fees are authorized by A.R.S.§ 33-442, which does not impose a limit on transfer fees.

The new law only specifically limits fees for HOA disclosure documents. Therefore, there is still no limitation on the amount of transfer fees.

If you would like more information regarding HOA issues, deficiency lawsuits, short sales, loan modifications, bankruptcy or other real estate related issues, please call our office at 602.957.9810 and arrange for an initial consultation with one of the Combs Law Group attorneys.

New Regulation Helps Consumers with Short Sales and Loan Modifications

Question: We would like do a short sale of our Mesa home. We are both licensed real estate agents in Wisconsin and we would like to list and sell our home ourselves. A real estate agent in our community advertises “experience as short sale negotiators.” We have never done a short sale, and we would like to hire this real estate agent to handle the short sale negotiations. When we contacted her, however, she said that she could only do the short sale negotiations if she gets the listing on our home. Why can’t we hire this real estate agent to do the short sales, and still list our home ourselves?

Answer: The Federal Trade Commission enacted a rule effective January 29, 2011, regulating “mortgage assistance relief services” (“MARS”) such as short sales and loan modifications. There are numerous disclosures and other requirements imposed by MARS. A real estate agent can list and negotiate the short sale of a home, provided that there is compliance with the MARS requirements and the real estate agent receives no additional compensation for negotiating a short sale. In other words, a real estate agent cannot charge the seller a 7% commission and a $2,500 fee for negotiating a short sale. If the real estate agent does not have a listing for the short sale of the home, however, the real estate agent can only receive compensation for short sale negotiations if, in addition to compliance with MARS requirements, the real estate brokerage firm has a loan originator (mortgage broker) license.

Note: A MARS provider cannot receive any advance compensation, and cannot receive any compensation at all unless the seller and seller’s lender agree on the terms of the closing of the short sale. Unfortunately, although this MARS rule is salutary and pro-consumer, this MARS rule illustrates the maxim of “locking the barn door after the horse has bolted.” Several years ago there were numerous firms receiving upfront fees of $2,500-$5,000 based on deceptive advertising, and not doing anything to assist owners of distressed homes. Due to consumer awareness and the threat of criminal prosecution, almost all of these firms are now out of business.

Arizona Homeowner Wins Deficiency Lawsuit against M&I Bank

A Maricopa County Superior Court judge recently applied Arizona real estate law‘s anti-deficiency statutes to protect a Paradise Valley, Arizona homeowner from M & I Bank’s lawsuit for a $500,000.00 deficiency. The homeowner was represented by Combs Law Group attorneys Benjamin A. Skinner and Adam D. Martinez. M&I Bank was represented by a Phoenix law firm.

The homeowner obtained a construction loan to build a single-family home, but ran out of funds several months later, before construction on the guest house began. In order to build the guest house, the homeowner obtained a HELOC from M & I Bank. Each loan was secured by a deed of trust on the home.

After living in the home, the homeowner defaulted on both loans, and the lender conducted a foreclosure sale for the construction loan and then sued the homeowner for the unpaid HELOC. The lender argued that because the HELOC was separate from the construction loan and was only used to build the guest house, the homeowner was not protected by Arizona’s anti-deficiency statutes.

The homeowner argued that the HELOC for the guest house constituted an extension of the original financing for the home and, therefore, the lender’s lawsuit was barred.  Without even reaching a trial, the judge agreed with the homeowner, dismissed the lender’s lawsuit, and ordered the homeowner to submit an application to be reimbursed for his legal fees incurred in defending the lawsuit.



Note: Prior to the judge’s ruling, the homeowner offered to settle the lawsuit, but the lender refused and made no counter-offer to settle.

If you would like more information regarding deficiency lawsuits, short sales, loan modifications, bankruptcy or other real estate related issues, please call the Combs Law Group office at 602.957.9810 and arrange for an initial consultation with one of our attorneys. clgz05

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loan modifications

New HOA Fees Law Effective December 31, 2011

New Regulation Helps Consumers with Short Sales and Loan Modifications

Arizona Homeowner Wins Deficiency Lawsuit against M&I Bank