Legal Question in Real Estate Law in California
Is Real Estate Broker's License in Jeopardy?
Situation: Hired by a local Mortgage Co. as an ''Administrative Mgr'' in which my R.E. Broker's Lic. would not be required. Company already had a ''Broker of Record''. After a few days on the job I became aware that none of the loan agts were licensed. I'm certain the Broker of Record knew this as well. At some point, I was asked to use my broker's License to facilitate a loan transaction using my DBA. This was an ''in-house transaction'' where a purchase(real estate transaction) and a loan were to take place on the same property between family members. The lender required that the Broker on the purchase be the Company (my employer), and the Broker on the loan be other than the Company. Thus, I was asked to be the Broker for the loan. I consented because I was ''expected'' to, and felt obligated since I was being paid $10,000 per month. It was understood that I was to get no compensation for helping to close this deal. I left the company after 5 months.
The borrower defaulted on the loan (made no payments), and the lender asked the Company to ''buy-back'' the loan. The Company claimed no responsibility, and shifted all of the blame to me. I don't have $450K to pay back, but the Co. does. Am I liable?
3 Answers from Attorneys
Re: Is Real Estate Broker's License in Jeopardy?
Buy back the loan or refund the rebate? Did you sign a contract with the Lender?
Re: Is Real Estate Broker's License in Jeopardy?
Strictly speaking, yes, BUT, you have a claim back against your employer, as well as borrower for indemnity, particularly if your employer did the due diligence regarding the borrower, i.e., verified his/her employment/net worth, etc. You need to take all documentation relatve to both your employment and the loan in issue to an attorney for careful review; also, if you were covered under your employer's E& O insurance during the period in question, you need to pursue that avenue in addition. It sounds as though you may have been duped by your employer and the REAL reason they hired you was to enable in-house loans for lenders who will not permit the purchaser's broker to broker the loan. There is so much loan fraud going on right now, and it has its origin in just the scenario you found yourself in.
Re: Is Real Estate Broker's License in Jeopardy?
Need to know more facts. And question: Liable for what? Is the bank coming after you? If you were a true W-2 employee of the company, it is highly unlikely that you are "liable" for this.
Assuming the company arranged the loan, and you were a mere pawn in the game, then you are probably not "liable".
Nevertheless, you likely knew that you should not have been involved in the transaction, yes? that may not help your case.
Your position at the moment should likely be that you are not responsible, that you were following the instructions of your employer, and that they can look to your employer to "buy back" the loan and forget about you.
If it leads to litigation, get yourself a good real estate litigator familiar with these types of situations. We are experienced real estate litigators, and if/when the time comes, please feel free to call or email for a no-charge consult.
Good luck.
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