Minimum commission on HUD PFS ??
I'm hearing that HUD will not allow the BUYER to pay part of the commission on a HUD Pre Foreclosure Sale?? Can anyone who knows for sure, confirm or deny this?
Here's the situation, it's a low priced sale and I have a minimum commission on my listing, so the actual commission is ABOVE 6%. The buyer has agreed to pay the commission amount above the 6% however, my short sale negotiator says HUD will not allow more than a 6% commission..... no matter who pays it.
I can't see any logical reason why this would be true. I've already read HUD's PFS factsheet which doesn't resolve this specific question.
Thanks,
Joe M.
REMAX
Replies to This Discussion
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Permalink Reply by DeLisa Rose on
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This must be a HAFA file. HAFA max is 6% and you may not "extort" any additional funds from either party or have any "junk fees". The seller may opt out of HAFA for more flexibility.
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Permalink Reply by Joe Montenigro on
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It's not a HAFA case..... it's a HUD PFS pre foreclosure sale.
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Hi Joe, please don't take this the wrong way, but that comment is like saying...
It's not an action series, it's a television production. Why is it not HAFA? The seller can get 3,000 to move, the bank will give you the list price and the minimum net and they can't reduce your commission. Nevertheless, your file may be a GSE loan. Was the original mortgage FHA, VA, Fannie (it had mortgage insurance)? It appears that it may be an insured loan that has restrictive guidelines that need to be adhered to in order for the bank to receive/ file a claim.
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Permalink Reply by Kevin - Greenville, SC on
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FHA and VA Loans are not eligible for HAFA.
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Permalink Reply by Bryant Tutas on
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Hi Joe. If your buyer is paying cash then simply have them pay you off the HUD1. RESPA does not apply to cash transactions so you getting paid before, during or after closing off the HUD is not an issue. As Mike says "Just do it!" And even if RESPA does apply there is no reason why your buyer can't pay you prior top closing as a fee for services unless your state laws prohibit this.
And DeLisa. Since it's FHA going HAFA is not an option.
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A. Max commission is 6%, servicer is to follow state law on how commission can or cannot be paid.
Source:
Matt Martin
Program Director, Loss Mitigation
HUD's National Servicing Center
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This really assumes though that the entire 6% is coming from the net proceeds of the Sale, not from one of the parties to the Sale.
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Hi Kevin,
That's a very good point but still leaves me uncertain..... state law says it's negotiable and can be paid by either or both parties but HUD appears to be saying NO, only 6% no matter who pays it..... so that's contrary to state law.
I"m going to leave it on the HUD, see if it gets approved that way and see what happens. I'll know in a few days.
So Kevin, how do you interpret Matt Martin's statement? can the commission be over 6% if it conforms to state law AND no more than 6% comes from the seller's side/ net proceeds?
Thanks for your input
Joe Montenigro
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I have reached out to Matt for further clarification.
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Have the Servicer submit a variance request to HUD.
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Permalink Reply by Michael Schneider on
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This is sooooo FHA to harm consumers in order to create the appearance of helping consumers.
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This is what my recent BofA FHA PFS approval states:
'Buyer’s costs and Bank of America non-allowed costs are NOT to be
paid out of seller’s proceeds. If the buyer does not pay these fees,
they will be paid out of the seller incentive fee, by the seller directly
at closing, or by a third party."
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