1) ATG Asks HUD to Address RealtorŪ-Controlled Business Misconduct | The business practices of some real estate brokers continue to be an area of concern to ATG and its members.

 

While we welcome competition, we see with increasing frequency business practices that are unfair to consumers and that pose a very real threat to the ability of attorneys to represent their clients.

 

This is particularly true with the continued proliferation of "captive" title companies, those companies owned by real estate brokers, which use the threat of blacklisting lawyers on the condition that the lawyer use the broker's captive title company.

 

I previously opined on this topic in the December 2009 issue of the Trusted Adviser with the article, "ISBA Opinion 10-02: The End of Marginalization is the Pathway to Emancipation" and the April 2010 issue of the Illinois Bar Journal article, "ISBA Opinion 10-02 Reins in Real Estate Brokers." ISBA Opinion 10-02 is clear that a Faustian bargain whereby a lawyer agrees to steer clients to a captive in exchange for the client referral violates the code.

 

But this opinion does not directly address the practices of real estate brokers.

 

In the public comment we submitted August 4, 2010, to the Department of Housing and Urban Development (HUD), we asked that HUD prohibit this conduct by rule.

 

This is just one of several other strategies we have in place to tackle this very real problem.

 

2) Clarifying Existing Law: Competition for Foreclosure Auction Sales Good for Homeowners, Communities | House Bill 5055 was introduced in June 2010 with the primary purpose of clarifying existing law that the plaintiff (banks or mortgage lenders) in a foreclosure action is allowed to select who conducts the foreclosure sale --- the official (such as a sheriff) or a third party (such as a private seller). The bill was vetoed August 18 after county sheriffs and county board members contacted the governor's office complaining about the revenue impact it would have on local county budgets.

 

In our letter to Governor Quinn August 4, 2010, we emphasized that the issue of greatest importance with the bill isn't sheriff revenue. Instead, it's about processing the mass quantity of foreclosed homes in a responsible, efficient, and cost-effective manner. Doing so helps to ensure foreclosed properties that are already subject to a judgment order clear the system and don't unnecessarily wait for months to be auctioned. When homes are in limbo, they can become vacant and blight the surrounding communities.  
 
This bill would have a long term positive impact on communities besieged by mounting foreclosures and the rights of foreclosure litigants. It is intended to add efficiencies to a very inefficient foreclosure process. The bill would benefit distressed homeowners who have to pay these costs and the communities affected by vacant homes and the foreclosure crisis. Read more in August 23, 2010, article in REO Insider, Illinois title company says HB 5055 would streamline foreclosures, or visit Advocacy in Action on our website.

 

ATG has and always will be here to advocate for and protect the interests of you and your clients. Please feel free to contact us, we invite your thoughts on either or both of these important topics.

 

Peter J. Birnbaum
President and CEO