Commission Getting Docked - The New Normal?
Hi, stars -
After a years-long stretch of full pay, I've had several commissions get docked lately to 5%. The most recent example comes from LRC, who is negotiating on behalf of Seterus. Per Seterus, they're not 'docking' me 1% - they're 'reassigning' it to LRC to do the negotiation.
I also have a companies called Power Short and Default Loan Servicing doing this on two other files with two other lenders.
Is anyone else seeing this? It looks like a workaround for the guaranteed 6% commissions Fannie and Freddie write in their guidelines and dollars-to-donuts there's a kickback on the other side.
Thoughts?
Alex Krumm
Re/Max Alliance Group
Broker Associate
GRI, Certified Distressed Property Expert
Winner, Five Star® Best In Customer Satisfaction: 2010, 2011, 2012
941-234-3597 Direct
941-954-5454 Office
941-444-2552 Fax
Replies to This Discussion
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Permalink Reply by Cami Pinsak on
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I had this start to happen with Seterus. Seterus claims not to even know about it. You can request that your file NOT be outsourced to LRC and pulled back and worked by Seterus. Then you'll get your 6 %. Seterus will try and bully you and your client- dont let them. The commission is an agreement between you and seller and seller did not give authorization for LRC to take part of it.
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Permalink Reply by Alex Krumm on
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Problem is, we've been outsourced for months and they didn't tell us they were taking the 1% until they were ready to send the approval :) It's slimy, but if it gets this approved for the sellers, I'm on board. Going forward I'll definitely try that tack.
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Yes- but if this is HAFA, they actually can't. And yes it is slimy when they tell you they just " need a few changes on the HUD". See if you can escalate this in Seterus. I did and got their approval in a week!
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One of them is HAFA - I actually escalated it straight to Fannie Mae and they told me the 1% drop was non-negotiable. If Fannie tells me this, what can I do??? sigh...
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Permalink Reply by Robin M. Willis on
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According to HAFA guidelines this is NOT allowed. Did you provide HAFA guidelines to show this?
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I certainly did, but their response was that they ARE paying 6% commission - it's just that 1% of it is going a different real estate brokerage, non-negotiable, and that brokerage would be working on the investor's behalf. That was straight from Fannie Mae.
I'm certainly not going to risk a short sale closing over the commission drop, but it's happened now on several files (mostly non-HAFA, to be clear) and it seems to me to be clearly a violation of HAFA guidelines. If it were happening often to other agents I'd bring it up to NAR.
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Have it pulled back to Seterus. It is being worked out of a third party. It is BS and seterus is not happy about it. But you can have it woked by Seterus without any 3rd party intervention or commission reduction.
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Permalink Reply by Kristy Hamilton on
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I have the exact same situation. Today, LRS stated that they take the 1% of the commission. Hmmm. (But, it is not on the HUD.) She further stated that the file could go back to Seterus. It is a smart tactic, on their part, though. Now, when you are in a hard spot, they cut the commission when you don't have the time remaining on the contract to have the file sent back to Seterus to complete and salvage the 1%. Imagine what kind of "commission" this leaves for a $58K sale with 2 agents. : (
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BTW: Fannie Mae investor, too.
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I think I have four pending files now where this is the case. Initially I was OK with it based on the promise that the files would be worked faster, but as it turns out, the files are really, really poky - and I don't think these companies have the authority to truly negotiate the file. It's a pain and it's cutting my compensation considerably.
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