Chase cut my commission, but will give seller $30,000!

I'm the broker/owner of a small firm.  My wife and I are attempting to purchase a $300k Chase short sale for our primary residence.  We got the approval letter a few days ago and I saw that they cut the commission from 6% to 5%.  Well, that's a real bummer since we were going to use that money toward closing costs, but I'm used to it happening.  Then I continued reading the letter to find that this is one of those Chase "incentive" deals and the seller is getting $30,000 at closing!  This is after he sucked every last bit of equity out of the house at the peak of the market!  That really put the commission thing into perspective!

I've been trying to find out if Chase is the investor or if it's a GSE and I've also been trying to confirm whether it's technically a HAFA short sale so that I know if Chase is even allowed to cut the commission at this point.  The problem is, I can't look up the investor without the borrower's social security number, and I don't have access to the SSA/RASS/Alternative RASS/etc because I'm on the buyer's side.  I mentioned something to the listing agent, and she claims that it's not a HAFA short sale, but I'm not sure she even knows what she's talking about.  I also have a suspicion that the seller/borrower is going to take care of the listing agent from that $30k if she can keep us from making waves.

At this point, I want to contact the negotiator myself, but I want to make sure I have all the facts that I can get.  I think Chase is just taking the 1% away because they can.  They know that, under normal circumstances, an agent/broker has a conflict of interest where, if they threaten to walk away from the deal, they're working against their client's best interest.  Especially when there is $30k on the line for the seller; if the agent killed the deal over 0.5%, the seller would go ballistic!  I'm in a unique position where getting the full commission IS in my client's best interest.  And besides all of that, giving this buyer $30k and shorting me (and the listing agent) $1,500 is just not right.

Any advice is greatly appreciated!

Billy

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Replies to This Discussion

Permalink Reply by Sam on January 24, 2012 at 5:43am

Billy, the making home affordable handbook is for HAFA only, the banks are not required to review under HAFA, even if the loan is eligible for HAFA review per servicer/investor participation, it still does not have to be reviewed and approved under HAFA terms  Not only that, but you are referring to program "guidelines", which your short sale was not approved under, and even if it was, a servicer going against a guideline is quite different then an illegal act.

And speaking of legal and illegal acts, it is illegal to represent the transaction as Arms Length if it is not.  If you signed an Arms Length Affidavit stating that none of the parties are related, then you are definately commiting an illegal act being that you and the buyer are both seperate parties to the contract and are related.  That is considered mortgage fraud.  And that would count for your last transaction as well.

Like I said, don't buy the property if it is not a good deal. 

Permalink Reply by Billy on January 24, 2012 at 6:35am

I'll confirm this later today and let you know what I find out (whether I'm right or wrong).

Thanks,

Billy

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on January 24, 2012 at 5:44am

Billy -

 

If you believe these section apply to your transaction ask the Listing Agent / Broker to simply send those pages to the Negotiator at Chase and tell the negotiator they have over reached their authority.

 

Let us know if it closes without a reduction in commission - fingers-crossed for you ....

Permalink Reply by Pattie Johnson on January 23, 2012 at 6:21am

In my experience, buyer agents buying a short sale property don't get a commission at all. I'd be happy with the 2%. I agree, these large seller incentives ARE WaMu portfolio loans, not Fannie or Freddie, certainly not HAFA.

Permalink Reply by Billy on January 23, 2012 at 2:32pm

Hmmm... this isn't the first house we've bought with me representing my wife.  I got a full 3% on an investment house last year.  That was with full disclosure too.  Maybe because she's the buyer and I'm her agent?  Or maybe you roll over too easy?

I've found several accounts of people getting Chase's huge incentives plus the $3,000 HAFA incentive, so I think your assumptions are wrong.

Thanks for the response though,

Billy

Permalink Reply by Billy on January 23, 2012 at 2:42pm

I suppose it could be lies spread across multiple random websites (including this one)... I've not seen it first hand.

"The HAFA program alone would not allow this"

Can you cite your source for this?

Thanks,

Billy

Permalink Reply by Billy on January 23, 2012 at 3:01pm

Here's a few examples I found in a matter of minutes.  I also couldn't find anything that suggested you couldn't double up the huge Chase/WaMu incentive with HAFA.

ONE

TWO

THREE

Sorry, I couldn't link directly on all of them.

Billy

Permalink Reply by Jeff Payne on January 24, 2012 at 5:03am

Was the other home a short sale?  How did you get around the arms length transaction issue?  Who was the lender?  Who was the investor.

I would be curious to see of the $3000 HAFA incentive in the same short sale as the Chase co-op program.  Those folks that use the Chase $30000 program are not enrolled in HAFA.

Permalink Reply by Billy on January 24, 2012 at 6:01am

It was a short sale.  The servicer on the first was Chase (funny enough) and the second was EMC, but the value was much lower (conforming), so it very well may have been a GSE.  We didn't have any issues with it, so I never even tried to look up the investors.

Regarding arms length issue, this is all that was required:

Did you see the links I posted to people saying their clients got the huge Chase incentives along with the $3k from HAFA?  Chase participates in HAFA, if the BORROWERS meet the HAFA/HAMP eligibility requirements, AND REQUEST a HAFA short sale, I don't THINK Chase can deny them.

Yes, it's probably not that common... Chase seems to be offering the big incentives on the WaMu portfolio loans for the most part.  Those borrowers are more likely NOT to qualify for the HAFA/HAMP eligibility requirements, but it certainly does not automatically disqualify them.  Go read the eligibility requirements.

Billy

Permalink Reply by Mike Rosania on January 24, 2012 at 11:13am

Im closing one next week with $15,000 incentive and 3000 HAFA...

Permalink Reply by Debra Wong on January 26, 2012 at 6:52am

I recently sold my house thru a short sale and both the selling agent and the buying agent received 3%.  Unfortunately though, i didn't get the HAFA money because my agent didn't do her part.

Permalink Reply by Lisa Cedillo on January 23, 2012 at 1:53pm

As frustrating as it is, I agree with Sam and Jeff, if you really like the house, I wouldn't make waves over $1500, you are still getting a great deal for the property, and the deal the bank makes with the seller is irrelevant to the deal made with the agents.  Although, I'd love to continue to get a 3% commission, I don't see it much, we are lucky to get 2.5%, I'm sure it will get better, but the fact that you are the buyer and the agent, may have something to do with the cut in commission, it may have nothing to do with it.  I suppose you can send a commission request for your 3% to the listing agent and request that she submit it to the lender, but it may take longer to close to wait for a response, and if they deny it, at least you tried, if they don't you are still getting paid a commission and you get a good deal on the purchase.

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