The Fannie Mae Addendum DOES NOT say buyer pays seller's title agent

By
Title Insurance with Key Title Corporation 63078

This is a plain language addendum that one would think is not that hard to understand, especially by those who claim to be "representing" the seller.   

I have read and re-read this addendum (current version dated 10/7/14) and simply cannot find a single word that says that buyer, if they choose to use their own title agent,  will pay the seller's title agent a "coordination" fee.  Nor can I find a single word that says that the buyer cannot be charged a flat fee commission or "admin" fee on the HUD.

These two issue have arisen over the last several weeks with the same local "seller" representative and I am simply stumped as to their dogged determination to insist that these items are part of the "Fannie Mae Real Estate Purchase Addendum".   One could reasonably assume that they have read the addendum themselves, but evidently not.

Upon review of the Addendum (Fannie Mae Form 001, dated 10/7/14) as it relates specifically to the payment of closing costs and adjustments you will find on page 5, Item 10(a) the closing costs and adjustments to be paid by Purchaser and Seller are laid out very succinctly and in plain language.  There is NOTHING in this paragraph that mentions the payment of a "coordination" fee to seller's title agent.  In regard to title and closing services,  page 5, Item 10(f) specifically requires that the buyer initial their choice between seller's title and escrow services or other (buyer) chosen title and escrow services.  Nothing here indicates that if buyer elects to use their own title and escrow service will they be required to pay "seller" title and escrow provider a "coordination" fee. 

Commissions are addressed on page 5, Item 10(c) and specifically state that seller will pay commission pursuant to the listing agreement between seller (FNMA) and listing agent. It says nothing about buyer paying commission or admin fees.  Why the seller's title agent insists that FNMA does not allow a buyer to pay their Realtor a commission or an admin/flat fee is just beyond me.

Over the last several weeks I have had the same fight with the same people over the same issue again and and again and have WON the fight every time simply by READING the addendum to the "seller's" title representative.   This makes me wonder though how many other title agents in Maryland have simply caved to the demands of seller's title agent and have added the "coordination" fee payable by buyer to seller's title agent to their HUD?   At the rate of $195 per file this fee adds up to a considerable sum being paid to seller's title agent for "coordinating" a closing

Have your or any of your clients been made to pay this "coordination" fee? If so, how did the seller's title agent justify that expense to buyer?  What was your buyer's response to being made to pay the fee?  Did you make a complaint and if so, to whom?

This is yet another example of why you should have your buyer use the services of a local title agent who is very well versed in transferring REO (Bank owned) property and who understands the bank addendums and will go that extra step to insure that your buyer is not being taken advantage of.

 

 

 

 

Posted by

Charlene Perry
Key Title, Inc. 
35 Fulford Avenue
Bel Air, MD 20104
410-803-4800

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Topic:
Home Buying
Location:
Maryland
Groups:
Investors
REO
Title and Escrow Group
REO REALTORS
Tags:
bank owned sales
bank owned property
maryland reo transactions
reo addendums
maryland settlement agent
harford county title agent

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CHARLENE PERRY, CLTP

Insuring the Past to Protect Your Future
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