The second lien holder has just notified me that their investors will only allow 4% in commission, isnt there legislation protecting our commission?  This is alot of work for 2%.

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If the loan in foreclosure was an FHA Freddie or Fannie no they can't but if not they can do that and have but you can fight to see if they will have a change of heart but if not the 3 memtioned above then yes they can.

Let me also add that with the above the commissions can't be reduced below what is in the listing agreement.

So if the agent has 5% and then place 6% on the HUD they will only pay 5% because thats whats on the listing contract.

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You can also plead with the second that the 1st is going to take any extra funds that is left because the 1st is driving the deal and they will still not receive anymore than what the 1st is allowing.

Well, typically when a 2nd does this it is with the stipulation at the savings go to them.  Would want to check that before making this argument.

 

Also, the 2nd can just refuse to go along with the deal and then go after the seller later after foreclosure (depending on the state, of course).  Or they can release the lien without giving up their rights for a judgement.

 

2nd mortgages get the shaft on many of these deals and some are simply not taking it anymore.  Especially credit unions where the loss hurts the entire membership.

Thank you James, this is a standard payoff to GMAC and short sale payoff to Round Point.  This is not FHA or Fannie Mae financing.  One of the requirements made for short sale approval consideration was to provide them with proof of funds from the buyer.  It appears that they see an investor with additional funds and they are holding us hostage.

Don't assume that you have a negotiation in good faith when dealing with a bank, especially for a 2nd. They can throw anything at you to see what they can get away with.  You have to be able to make a living, so don't feel bad about asserting your position.  Breaking your mindset that they are ethical and the end-all, you can turn the tables. How important is it to this 2nd to have cooperation from realtors? Do they do loans? Do they need agents to make money? Would you mind telling them that you will be explaining to the various organizations that you know such as your agency, at your state seminars, on various websites, in various blogs/forums that this company screws over agents who work hard to get deals done? That you will be complaining about their demands to the state banking board, attorney general, your state senator? Etc. You have a contract to be paid, they are interlopers demanding that you break your contract and lose money on a deal that is (usually) much harder than a simple real estate transaction. Turn up the heat the other way.

You can also offer to take the lower percentage on their part of the deal - I assume their portion is pretty small - I doubt anyone has offered that before. It points out, subtly, how small they are in the deal and how petty they are, puts them in the same position as you - mentally justifying their role. Make them put their brains in gear to mull over such a concept.

And, finally, several agents have reported here and elsewhere just pushing through and ignoring a cut in the commission and succeeding. This has also worked with the occasional 3rd party forced on you from the bank which demands a 1% cut for doing nothing - agents have said NO and pushed through the HUD-1 with nothing going to them and succeeded.

If you go this last route, you make it easier to force them to respond in writing that they insist upon screwing you over - and you can discuss with them how you will be sending that notice to the various groups mentioned above and posting it in various places.

In other words, you don't have to just roll over and take it. If they want to screw you out of what is less than a penny to them, then make them work hard for it and pay for their tactics.  But, hey, it's up to you, right?

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