04/15/2024
Hey there Mortgage Loan Officers and Branch Managers:
I have good news for you. Fannie Mae and Freddie Mac today issued identical policy clarifications on the NAR commission settlement.
Here's the technical language from Fannie:
"Interested party contributions permits interested parties (including property sellers) to make contributions to the borrower's closing costs subject to maximum limits between 2% and 9% of the property value," Fannie said.
The GSE went on to say that "typical fees and/or closing costs paid by a seller in accordance with local custom, known as common and customary fees or costs, are not subject to the IPC limits."
Translation: The buyer agent commission will not be considered a seller concession for GSE loans, which follows the FHA saying basically the same thing a few months ago (concessions can be up to 6% for FHA loans).
We have yet to hear from the VA, but the fact that the agent's commission can essentially be baked into the financing for most loans theoretically solves a big potential problem in the market.
Before we get too excited, let's bear in mind that the DOJ could write a statement of interest calling for a total dislocation of commissions and the judge could rip up the settlement agreement. But the GSEs coming out and saying they'll largely maintain the status quo is a positive sign if nothing else.
James Kleimann
Managing Editor, HW Media
