I just received approval from Fay Servicing LLC in Chicago for a HAFA short sale in Elk Grove. The negotiator said her servicer never pays a commission over X%. I pointed out that this is a HAFA, and my listing agreement specifies a commission of Z%, and they must approve Z%.

The negotiator disagreed, and her supervisor disagreed. They contend that the guidelines state the commission can be "up to" Z%, and therefore they want to authorize X%. I sent them HAFA guidelines from CAR and a print-out portion from the MHA handbook, but the negotiator still refuses to budge. In fact, they went so far as to threaten me. They basically said if I don't play along with them, they will assign a new listing agent, as if they have that kind of authority, puhlease.

I imagine that this type of bullying has worked with other real estate agents in the past, but it doesn't work with this one. I am not intimidated.

There is also the viewpoint of not dying on this particular hill and choosing the battle. I would never jeopardize a client's short sale nor hold it up from closing because we disagree over the commission. But I will pursue this with the Treasury Department and with the Department of Financial and Professional Regulation in Illinois if I must.

Somebody has to stand up and say no to these banks and not just rollover. It is a matter of principle. It is not the money.

Here is what the National Association of Realtors has to say about the issue of HAFA commissions:

Under the Treasury Department’s HAFA guidelines for non-Fannie Mae/Freddie Mac loans, commission policy depends on when the sales contract is executed.

• If a sales contract has not been executed, the servicer specifies the amount of commission in the Short Sale Agreement (SSA) as a “reasonable and customary” closing cost not to exceed 6 percent of the contract sales price.  The servicer transmits the SSA to the borrower for consideration of its terms.  The SSA requires the borrower to list the home with a real estate broker.  The borrower and the prospective real estate broker may negotiate with the servicer on the terms of the SSA, including the proposed commission.  If the borrower and the listing broker decide to participate, both must sign the SSA, agreeing to its terms.
• There is a different commission policy for non-GSE loans if the borrower submits an executed sales contract to the servicer for approval before a SSA is executed.  In that case, the sales contract is submitted to the servicer along with an ARASS.  The amount of the commission in such a case is the amount negotiated in the listing agreement, not to exceed 6 percent.  This policy recognizes that the real estate professional has already done the work of marketing the property and obtaining an executed sales contract, so it is not appropriate for the servicer to reduce the commission below the already negotiated amount after the work is done.