Fannie Mae Announces Policy Prohibiting Lenders
from Reducing Commissions Below 6% on Short Sales.
March 2, 2009 5pm
Every
agent who has participated in a short sale transaction knows there may
come a moment when the lender announces a reduction in the commission
it will approve as a condition of accepting an offer. A great deal of
angst circulates around this issue because, despite what the seller
agreed to pay in the listing agreement and notwithstanding the
advertised SOC, the transaction cannot close without the lender's
approval which is often a "take it or leave it" position. The buyer and
seller want the transaction to close and agents do not want to be a
road block to that outcome. Balanced against this is an agent's and
broker's need to earn a reasonable income and justify their own
expenses and liability incurred in a transaction. If lenders condition
acceptance of short sale terms on agents' willingness to accept a
reduced commission, agents really have no power - except to decline to
list or show short sale properties in the first place - a tragic result
for everyone, including lenders.
Fannie Mae was made aware of this pattern and the
adverse consequences
of agents and brokers avoiding short sales. As a result, Fannie Mae
announced a revised policy that took effect March 1. Now, "closing of
preforeclosure sales may not be conditioned upon a reduction of the
total commission to be paid to real estate agents to a level below what
was negotiated by the listing agent with the borrower, unless the fee
exceeds 6 percent of the sales price of the property in aggregate."
This policy applies to Fannie Mae loans only and only to those loans
where the borrower is in default. Nevertheless, it should give agents
and brokers a degree of comfort in knowing that the agreed and earned
commission will be paid on many short sale transactions. For a property
secured by a Fannie Mae loan, where the seller is in default, the
lender may no longer condition acceptance of buyer's short sale offer
on the agents' and brokers' agreement to reduce their commission below
a total transaction commission of 6%.
The new Fannie Mae policy says the following:
Servicing Guide, Part VII, Section 504.02:
Contacting Selected Borrowers
Effective
March 1, 2009, closing of preforeclosure sales may not be conditioned
upon a reduction of the total commission to be paid to real estate
agents to a level below what was negotiated by the listing agent with
the borrower, unless the fee exceeds 6 percent of the sales price of
the property in aggregate. Servicers are reminded that they must
continue to obtain any approvals that may be required by interested
third parties in connection with preforeclosure sales.
;)
;)
;)
Great news Sandy! The last short sale I did paid 2.5% and I worked HARD!!! I always do though.