BOFA Short Sale NEW HUD Guidelines

Good morning superstars!

I received a call from my BOFA  FHA short Sale negotiator.  She wanted an updated HUD line 701 showing WHICH agent/person within the Broker's Company that would be getting paid the commission on my short sale transaction.

 

Is anyone here aware of such a HUD change effective March 1st?

 

Thanks!

LindaS

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Replies to This Discussion

Permalink Reply by Christine Bonomo on March 7, 2013 at 8:21am

I haven't heard about any required changes for the HUD1, but I did receive a request from our negotiator at BofA, saying as of 3/1/2013 their required listing agreement verbiage has changed.

The new required verbiage is " Seller may cancel the Agreement prior to the ending date of the listing period without advance notice to the Broker, and without payment of a commission or any other consideration if the property is conveyed to the mortgage insurer or the mortgage holder. The sale completion is subject to approval by the mortgagee."

It conveys the same message as previously required verbiage with the exception of inserting "Mortgagee" instead of "Bank of America" in the last sentence. Wonder if they are planning on selling this particular note before approving the short sale, which has been awaiting approval since being submitted in August of 2012.

Permalink Reply by Jim McCormack on March 11, 2013 at 2:17pm

I was just notified of the need for this exact same listing agreement verbiage on a short sale where I represent the Buyer, not the Seller.  Since I am not the listing agent on that short sale it was just an FYI from the listing agent to me.

Permalink Reply by Kevin - Greenville, SC on March 7, 2013 at 9:40am

HUD has not made any changes although changes to the FHA PFS are in the works.

Permalink Reply by Kevin - Greenville, SC on March 7, 2013 at 9:43am

I've always put this verbiage in the Bank of America FHA PFS I have worked and closed -

 "Seller may cancel the Agreement prior to the ending date of the listing period without advance notice to the Broker, and without payment of a commission or any other consideration if the property is conveyed to the mortgage insurer or the mortgage holder. The sale completion is subject to approval by the mortgagee."

They have never requested mortgagee to be replaced with Bank of America.

Permalink Reply by Ghana Bigsby on March 8, 2013 at 8:08am

Does your contract require the agent to sign? Seems like they may already have the info they are requesting.

Make sure this info matches your reply to this request.

Permalink Reply by Wendy Rulnick on March 9, 2013 at 11:27am

Linda - That is interesting because the transaction belongs to the broker.  Then, the broker's private agreement with his agent will determine if and how he is paid.  This seems to be "straying" again into areas that either HUD or BOFA has no knowledge.  The seller's agent or buyer's agent is ONLY a sub-agent of the broker, for example, Smith Realty.

Permalink Reply by Manuel Rosa on March 10, 2013 at 1:20am
This is not a HUD PFS requirement; however I did have B of A make the same request of me on a non FHA short sale HUD. It is asinine.
Permalink Reply by Pat Perrotta on March 10, 2013 at 1:56am

I know BAC has a new authorization form that just was released (2 pages).  I have not heard this one, but they probably want to make sure the sales and list agents are different.  I had one lender ask for license numbers.

Permalink Reply by Sharon Poisel on March 10, 2013 at 2:02am

Many lenders refuse to pay commission to some agents (i.e., related to seller, dual agent who would get both sides, purchasing for family member) or, in case of dual agent, will only pay one side.  Scuttlebutt has it that some agents started getting wise to this situation and put the transaction in another agents name, then were paid a 100% referral on their side of commission. It sounds like it is possible BOFA has become aware of this and this could be their remedy to the work around.

Permalink Reply by Paul Francis - Vegas Short Sales on March 10, 2013 at 4:18pm

FHA guidelines allow dual agency for short sales as long as the State allows it.

Permalink Reply by Barry Chadwell on March 10, 2013 at 2:22am

Yes, just had to do the same thing, along with the change in listing agreement verbiage, on a deal in process since August.  Also, it has been in process so long that the original ATP expired so had to go back to HUD for re-approval. I did request (maybe a little stronger than request), escalation and got the approval of the "variance" in 7 days as opposed to the 14 BOA said it would take.  Now they say we are 10 days away from closing.  I want to believe...

Permalink Reply by Scott Godzyk on March 10, 2013 at 2:53am

the reason for teh request is so that they make sure the seller or a relative is not getting a commission. I have been asked for a simple addendum stating such. The verbage in the listing is so if they get the seller to sign a deed in lieu or if they assign it to the bank or PMI company and place it in their new short sale auction the listing agent commission gets reduced to as low as 15 for listing and another 1% if they represent the buyer. i am hoping this is one trend that does not expand.

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