Worst-Kept Secret: Foreclosure Banks
Flaunting MN Disclosure Laws
A problem has arisen in Minnesota regarding lenders who have acquired property through foreclosure and then listed those properties for sale to Minnesota consumers. The problem is that lenders are refusing to comply with Minnesota disclosure laws.
–Donald D. Smith and Brad J. Boyd, “Seller Disclosure Obligations Under Minnesota Law for REO Properties”
The above paragraph, from a memo drafted by the legal counsel to the MN Association of Realtors, is hardly news to anyone representing would-be Buyers trying to buy foreclosures lately (or to readers of this blog).
However, what’s interesting is the Board of Realtors’ response, undoubtedly borne of futility: instead of getting the appropriate legal authorities (MN Attorney General? U.S. Attorney General? Hennepin County Attorney? The Congress?) to get the banks to stop defying the law, it is shifting responsibility back to the Realtors.
Namely, it advises Realtors, when working with banks that refuse to comply with MN disclosure laws, to obtain from the bank the “legal support for that position.” (Good luck with that one!)
Assuming, quite safely, that no “legal support” is forthcoming, then what?
Smith and Boyd again:
Without such evidence, supported by accurate and substantiated legal authority, Realtors in the state of Minnesota are being encouraged to avoid unwarranted personal legal liability and risk to themselves and their brokerage, by resigning from any and all listings with sellers who refuse to comply with these legal obligations.
That’s right: put the burden on Realtors to ostracize law-breaking banks.
After everything that’s happened to housing (not to mention the broader economy) the last couple years, is it really possible that banks are still running the show?? (and yes, that’s rhetorical)