Settlement costs waived for some mortgages


April 17, 1994|By Michael Gisriel

Q: Are there local lenders or mortgage companies that provide mortgages without any settlement costs?

M. Goldberg, Reisterstown

A: Many local and national lenders with Maryland branch offices offer home equity loans between $5,000 and $100,000 with a choice of either a full waiver or a rebate of all closing costs based upon account usage.

Also there are some other local lenders who offer "no cost" or "low cost" first mortgage loan programs. And the FHA and VA offer "streamlined refinance" programs with little or no settlement costs.

Q: What is the story with this so-called "dual agency." I keep reading about it. Does the real estate agent represent the buyer or the seller? Also, who pays the commission?

Gertrude Scott, Baltimore

A: Under the traditional practice in Maryland, the commission for both the selling agent (buyer's agent) and the listing agent (seller's agent) was paid for at the real estate closing out of the seller's proceeds from the sale.

Under existing law, a licensed real estate salesperson who participates in a residential real estate sale should disclose in writing whether the real estate agent represents the seller or the buyer. But this law is often ignored.

The legislature just passed a bill that will strengthen and clarify this written disclosure requirement and will also disclose the differences between a seller's agent and a buyer's agent and also the duties and obligations of the various agents.

The new law takes effect Jan. 1, 1995.

It also explains when these disclosures must be made to the buyer and to the seller.

The new law would also require a written consent to be signed whenever a real estate broker is involved in a "dual agency" relationship -- when the broker's agents are representing both the buyer and the seller in the same transaction. The broker may represent both parties -- but the broker must designate separate agents for the buyer and for the seller.

The bill would clarify what has been a confusing situation for buyers and sellers in Maryland.

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