Fannie Mae Stops Cutting Real Estate Commissions In A Short Sale
Fannie Mae stops cutting real estate commissions in a short sale
WASHINGTON – March 2, 2009 – Real estate commissions are now protected in some short-sale transactions. In response to Realtor concerns, Fannie Mae announced that “preforeclosure sales may not be conditioned upon a reduction of the total (real estate) commission,” providing the total commission does not exceed 6 percent. The policy became effective March 1.
The move affects only short sales where Fannie Mae backs the mortgage, but experts hope Freddie Mac and other government-sponsored enterprises (GSEs) will soon follow suit. Currently, Fannie Mae and Freddie Mac back over half the mortgages in the U.S.
The change seeks to solve a problem encountered by many Realtors. After putting together a short-sale package and submitting it to the lender for approval, Realtors report that lenders would often counteroffer with a cut in commission. Realtors then found themselves working twice as hard on a short sale for less money.
In November during the National Association of Realtors’ (NAR) Legal Seminar, Fannie Mae officials turned to Realtors and asked what could be done to expedite the short-sale process. Among other things, attendees took Fannie Mae to task for their commission policies. The recently announced change is Fannie Mae’s response.
Fannie Mae’s announcement appeared as a short notice in a “Miscellaneous Servicing Policy Changes” announcement. It says:
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 the 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.
The original document can be downloaded from Fannie Mae’s Web site
No other lender pays only 3 %, everyone is wrong and you and WAMU are right then.
In my oppinion they are trying to call your bluff and get you to bend first. However, if you make your payments, why would they do a short sale. They are better off the more payments you make. Unless your not willing to walk away, you may not get them to the point of accepting a haircut on their loan.
Important Notice: American Home Mortgage is unable to continue the origination or funding of mortgage loans, and no new loans are being accepted. After carefully assessing the sudden adverse impact on the Company’s business with respect to its liquidity, due to the extraordinary disruptions now occurring in the secondary mortgage and real estate markets, American Home Mortgage Investment Corp. and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
Ihave never heard the tails of dealing w/ a bank in BK.
"Typically, the mortgagor must stipulate (in writing) he/she have done nothing to impact title to the mortgaged premises."
When does this occur?
In some markets this is true. Depends on the market and the opportunity.
I think the bank is the biggest variable.
you may help a nice person to avoid foreclosure.