Fannie Mae Institutes Guideline That Keeps Realtors Happy
Fannie Mae has stepped in to prevent banks or mortgage lenders from shortchanging Massachusetts Realtors on short sales. “Short sales” denotes when a lender avoids a foreclosure by allowing the sale of a distressed property at less than the outstanding mortgage value.
Although spokesman Brice Spitzer for the Massachusetts Bankers Association says that his member banks do not engage in this process, Massachusetts Realtors are pleased with the development, saying it will improve the short sale process. Fannie Mae has prohibited lenders from forcing realtors to reduce their commission to close a short sale on a Fannie Mae-backed mortgage. This practice had created situations in which Realtors worked on a difficult, time-consuming sale for months, only to be pressured into this commission reduction at the last moment. Many Realtors stopped accepting short sales because of this tactic, and Fannie Mae is now reacting to this drop in Realtors participating in short sales.
Source: Murphy, Ian B. “Realtors Rejoice at Fannie Mae Short Sale Change.” Banker & Tradesman: The Financial Services and Real Estate Weekly for Massachusetts.
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