On February 24, 2009, Fannie Mae sent Announcement 09-03 to its servicers instructing them not to negotiate commissions on short sales below the amount negotiated by the listing agent (unless the commission exceeds 6%). The requirement took effect March 1, 2009. Fannie Mae recognizes that:
- negotiating commissions for short sales is unfair because getting a short sale to closing requires intensive work over many months, often requiring working with numerous buyers, and
- compensating real estate agents fairly benefits Fannie Mae because agents play a crucial role in short sales.
The Announcement reminds services that third party approvals (i.e., private mortgage insurers) may be required and can affect commissions. The National Association of Realtors (NAR) has asked both Fannie Mae and Freddie Mac to strengthen their policies against reducing short sales commissions, welcomes Fannie’s announcement, and has urged Freddie Mac to follow Fannie Mae’s lead.