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

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 not only violates MLS policy*, but it now also violates Fannie Mae guidelines.  

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.

Link to the whole Announcement 9-03

*See related post on FAQ no Short Sales from the AAR.

This is good news for REO agents, consumers, and banks in the long run, because it removes a large impediment that some agents had showing short sales.