Trade groups urge Fed to address commission changes

Leading real estate trade group calls on federal agencies to address Upcoming commission changes That could upend mortgage originations for certain homebuyers.

The new guidance will come into effect in July this year National Association of Realtors Settlement The use of buyer’s agents can be reduced because sellers do not have to compensate them on multiple listing services.While parties can still negotiate fees, and traditional compensation model Although likely to remain in place, industry leaders are wary of new rules that conflict with federal underwriting standards.

The Federal Housing Administration addressed some of those concerns Thursday as it answered questions from a open envelope Wednesday, NAR and the Mortgage Bankers Association. According to Federal Housing Administration (FHA) guidelines, buyer’s premiums are not included in the interested party contribution cap, as are loan closing costs and concessions such as interest rate buyouts.

“If a seller continues to pay real estate agent commissions and fees to a buyer…and the amounts of the commissions and fees are reasonable, current policy does not treat those payments as contributions from interested parties as long as all other requirements are met,” the FHA said. ”

Another question remains about the origins of VA support, where buyers cannot pay directly to its “professional representatives.” In a separate letter this week, NAR and Community Housing Lenders of America asked regulators to expedite policy changes to address situations where sellers would not pay commissions to VA buyer’s agents.

NAR President Kevin Sears wrote in a letter to John Bell: “VA buyers are immediately put at a disadvantage that could force them to abandon professional representation in an already limited space. lose properties from their inventory, choose a different loan product, or exit the market entirely.” , executive director of VA Loan Guaranty Services.

The Department of Veterans Affairs is working with the Justice Department to review the impact of the NAR settlement, a spokesman said Thursday.

The Federal Housing Finance Agency and other federal housing stakeholders have been largely silent on the subject since NAR was announced on March 15. Industry veterans and analysts suggested federal lawmakers could address protections for VA and other affected buyers before the rule changes.

NAR’s massive $418 million settlement with homebuyers, which also includes brokerage firms owned by members of the group whose 2022 transaction volume does not exceed $2 billion, is awaiting approval from a federal judge.Federal law enforcement intervention also remains a possibility as The Justice Department can weigh in Regarding the settlement proposed by NAR.

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