Prescott Arizona Area Foreclosure News

On Tuesday, February 22nd, 2009, Fannie Mae released an announcement with updates to the Servicing Guide used by banks in the U.S.

One of the sections that will impact short sale sellers and REO agents nationwide is the prohibition of banks making the sale of a short sale conditional upon the lowering of commissions.

If you’ve ever listed your home for a short sale, you’ve probably seen the following statement in REALTOR remarks:

COOPERATIVE COMPENSATION OFFER SUBJECT TO COURT OR LENDER APPROVAL AND MAY BE ADJUSTED.

Well now it now also violates Fannie Mae guidelines for banks set forth in its Servicing Guide:

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers

No Negotiation of Preforeclosure Sales Commission

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.

New Fannie Mae Servicing Guideline

Link to the whole Announcement 9-03

Why do you care as a seller?  Isn’t it good to pay less commission?

This is good news for everyone:  home sellers, REO agents, consumers, and banks in the long run, because it removes a large impediment that some agents had showing short sales.  Not only are short sales difficult and painstaking, but there was also the chance that the selling agent would make less than the listed commission.

Please contact me if you need more information or see some of the related posts below.