The National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA) sent a letter to the Federal Housing Finance Agency, Federal Housing Administration, Fannie Mae, and Freddie Mac requesting confirmation that homebuyers can continue to access mortgage credit following NAR’s proposed settlement in the Sitzer/Burnett case.
The trade groups specifically sought input that the traditional business practice excluding seller’s payment of commissions for buyer’s agents will continue to be excluded from the limits on Interested Party Contributions.
“As you are aware, under current practice, most home sellers pay the listing agent commission, who in turn pays the commission of the agent representing the buyer,” the trade groups wrote in their letter. “Because commissions of buyers’ agents are customarily paid by the listing agent, they are excluded from caps on IPCs established by the GSEs and FHA. Under the settlement, cooperative commission is no longer permitted to be displayed on a Multiple Listing Service (MLS), but it is not banned – listing brokers and sellers can continue to offer compensation for buyer broker services, just not through the MLS. In addition, the setlement does not prohibit home sellers from paying buyer agent commissions.”
“Thus, the settlement creates two clear paths for sellers and buyers to negotiate to continue the custom of listing agents or sellers paying buyer agent commissions,” the letter added. “Consequently, once the settlement is in effect, we believe that FHA and GSE policy should continue to exclude seller or listing agent payment of buyer agents’ commission from IPCs. Confirming your policies and maintaining this practice will sustain the current flow of mortgage capital to home buyers without change or delay.”
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