Fannie Mae Short Sale Commission No Longer Cut

Real Estate Agent with RE/MAX Executive Realty 91362

                                                                                                                                                       Commission no longer cut in short sales under Fannie Mae

Recent lobbying by the National Association of Realtors (NAR) and more than likely other online prominent educational postings at such places like Active Rain to preserve commissions led Fannie Mae to recently instruct all servicers NOT to reduce Real Estate commissions on short sales. 

Fannie Mae sent an announcement to its servicers stating that as of March 1, 2009 negotiations on short sales commissions below the amount established by the listing agent is prohibited unless the commission exceeds 6 percent. 

Fannie Mae has recognized that negotiating commissions for short sales is unfair because of the extensive work required in many occasions that occur over many months and working with numerous buyers. Paying real estate agents fairly benefits Fannie Mae because Realtors play a crucial role in short sales. The fact that many banks would turn around after a foreclosure and offer commissions much higher did not make much sense.

So as a home seller considering a short sale you may be thinking why do I care if the Realtor gets paid a certain amount of commission? The answer is real simple. When selling your home as a short sale there have been a couple of major issues that continue to plague the industry.

Reason number one is short sales take in many instances an exceptionally long time to get approved. There are times where it takes up to six months just to get a yes or no answer on whether or not the lender will even accept the short sale!

Reason number two is that everything has been open to negotiation up until this point. As a Realtor working with an excellent buyer, the last thing you want to hear on top of waiting months and months is that your commission is being significantly cut.

Massachusetts Short sale RealtorsIn a challenging market, a Realtor is your best friend. Banks shouldn't be alienating the party who is an alie in getting the sale accomplished. While it is always in a Realtors best interest to work on their clients behalf, can you see why a Realtor would begin to get a complex and instruct their buyers to stay clear of a short sale?

While this measure taken by Fannie Mae is an important one, the government really needs to step up their efforts of putting pressure on lenders to do whatever is necessary to get these short sales moved along. Whether is more staffing or better trained staffing, the problem starts and ends at the banks.

The announcement also reminded servicers that third party approvals like private mortgage insurers may be required and can affect commissions. 

According to NAR work they are continuing to work with both Fannie Mae and Freddie Mac to strengthen their policies against reducing short sales commissions.

NAR's next steps include continued work with Freddie Mac and other mortgage providers to enact similar regulations that will ensure that Realtors are compensated fairly. 

Currently, Fannie Mae's policy only applies to loans it owns and guarantees, therefore if a loan is owned or guaranteed by another lender the commission policy of Fannie Mae does not apply.

In order to find out if Fannie Mae is servicing your loan you can either call and ask your lender or if they are not forthcoming with the information you can get in contact with Fannie Mae by filling out the Fannie Mae mortgage request form.

If you live in the Metrowest Massachusetts area and are considering a short sale I would welcome the opportunity to answer any questions you may have. I have been successfully closing short sales and work with a local Real Estate attorney to accomplish this goal. So far I am batting 1000% and have not had a short sale rejected.

Here are a few articles I have written that you may offer you some additional insight about short sales:

Getting your Massachusetts short sale debt released

Acceptable hardships Massachusetts short sales

Foreclosure avoiding it through a short sale or loan modification

Short sales and deed in lieu of foreclosure

Ethics in a short sale Realtor responsibilities

Massachusetts short sales



About the Author: The above Real Estate information on Fannie Mae short sale commissions no longer cutRE/MAX Executive Realty Metrowest Mass was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.



Subscribe in a reader



Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.

Posted by

Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comments (67)

Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Shirley - Lets hope the rest follow suit. It will make a big difference for the Realtors that end up working with short sales.

Mar 19, 2009 12:23 AM
Debra Donahue
RE/Max River's Edge - Seekonk, MA
Debra Donahue Realtor RI & Mass

Good Post.

 I am so frustrated with a short sale I am doing that is Fannie Mae and is suppose to close on Monday and they have cut my commission with out saying anything. I had submitted it at 6% and they have brought it down to 5%. She said they only way to change this is to reapply for the short sale which will means starting over. I have informed her of the new rule doesn't seem to matter. I do not know where to go with this.

Mar 19, 2009 02:59 PM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Debra - I think she is giving you a line. The rule was put in place so banks could not do this. I would go over her head in speak with someone higher up. The bank would not be starting from scratch because of a commission dispute. Something smells rotten in Denmark!

Mar 19, 2009 03:02 PM
The Somers Team
The Somers Team at KW Philadelphia - Philadelphia, PA
Delivering Real Estate Happiness

Bill - Wow ! Great post - I was not aware of this.  Thanks for the info !  We have 2 short sales that we are waiting for the bank's response.  I will be armed and ready if they try to dip into the commiss : )

Mar 22, 2009 01:16 PM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Chris - You will just have to make sure that the loan is with Fannie Mae. If not the short sale commission could still possibly get cut. The fact that Fannie Mae has taken this stance should eventually help with the rest of the lenders.

Mar 22, 2009 02:05 PM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

I've now run in to two banks not telling me who the holder of the loan is and if they are just servicing the loan or not. OH HOW FUN! I have to make other calls to find out that if it is a fannie mae loan or not and in one case it was and when I threatened to take the case to fannie mae the quickly changed their tune.


Mar 24, 2009 08:46 PM
Debra Donahue
RE/Max River's Edge - Seekonk, MA
Debra Donahue Realtor RI & Mass

Thanks Bill I am still working on it.

Mar 25, 2009 03:05 PM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Interesting Todd. It is funny what a little "heavy convincing" can do sometimes.

Debra - Good luck:)

Mar 26, 2009 12:08 AM
My Short Sale Angel of Sacramento

I like your perspective, quoted you in my latest post:

Hard working short sale agents deserve to be paid full commission!


Apr 09, 2009 09:12 AM
Ulises Escobar

Has any of you had a problem where the 1st is Fannie Mae BUT the 2nd is not so they claim that this does not apply to them and that they can demand that the commission be cut.

Citimortgage through their collection agency PennCro and Associates is doing just this!


Apr 24, 2009 10:24 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Angel - Thanks for the quote on your blog and the linl to my blog post.

Ulises - I have heard that there are some doing this. I guess they can if the 2nd mortgage is also not with Fannie Mae.

Apr 24, 2009 10:55 AM
Jami Van Den Bogaert
RE/MAX House of Brokers - Springfield, MO

I just stumbled upon this post but I am glad I did! Great to know!

Aug 24, 2009 05:13 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Jami - It is good to know the short sales rules because if you don't, the banks on many occasions will try to get away with whatever they can! Realtors need to stand their ground in these circumstances.

Sep 03, 2009 03:30 PM
Jane Lynch
Re/Max Specialists - Saint Paul, MN

Look what I just got from Everhome (National City is the new negotiator).  We had agreed on $4500 in closing costs and prepaids from the seller.  Is this true that Fannie Mae can only pay $2500.  This is a joke.

Association Dues: They will only pay 6 months of the past due balance

Assessments: They will NOT pay or allow on the HUD (if any)

Seller Paid Closing Costs: They can NOT exceed $2,500.00 per Fannie Mae

Delinquent Utilities: They will NOT pay any past due balance

Commission: 6% approved with 1% given back to National Quick Sale

Additional Fees from Commission: $250.00 processing fee & $99.00 registration fee paid (

Nov 17, 2009 07:46 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Jane I am not 100% sure about your question about $2500 being the max amount of closing costs that can be paid on short sale, however, this sounds like it may be accurate.

Nov 17, 2009 08:07 AM
Jane Lynch
Re/Max Specialists - Saint Paul, MN

Thanks for your reply.  I am checking in to it.  I won't bore you with the details of this long drawn out transaction.  Also my error but the negotiating company that came on at the 11th hour with these changes is National Quick Sale.  If you have any further info on seller contributions I would appreciate it.  Thanks again and have a great day.

Nov 18, 2009 12:43 AM
Laurie Missouri Realto
They have revised this to NOW REDUCE our commission. The Chief Executives received 6 million at the end of December and talks are Fannie and Freddie to be no longer.
Feb 02, 2010 10:52 PM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Laurie where is the world did you get that information?

Feb 02, 2010 11:08 PM

Hi Bill,

Well, after 6 months of trying to get my short sale listing through B of A and their Equator system, I finally made progress in January.  The newly assigned negotiator contacted us with a counter offer of COE date and cc for cash buyer.  I had told the negotiator that recently their had been a leak in the home and instead of cutting the cc, leave it and ask buyers to take house as is since getting cc.  He informed me since the cc was 1.5 % that he could "push it up more" if needed.  Well, at the time I didn't want to push our luck and it had been a small leak.  Everyone agreed to counter and signed everything.  3 weeks later (today) he emailed me another counter offer of extended closing date and NOW a commission reduction of 1%.  Well #1- this is a Fannie Mae and I knew this going in #2 why are they countering me with that after they already countered us once and we agreed to everything?  #3 I know they have the money because he told me how much he was able to give for the seller due to leak.  So, I emailed him back and pointed out this little tid bit of info about fannie Mae and sent them the link to view themselves.  I have not heard back yet, but if I get a negative response is there anyone I can contact at Fannie Mae to "get their servicer in line"?

Feb 09, 2010 12:02 PM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

 Cynthia - You will more than likely have to fight hard and let them know you are not going to back down. I would also sight "contractual interferance" with your listing agreement with the seller.

Feb 09, 2010 12:16 PM