Saxon Mortgage Short Sale Approval Terms

Ginger:

We had a bank cut total commission to 2.5% last year. We evaluated the circumstances, and because of that particular client relationship, we chose to close the sale. The kicker was that the selling agent also agreed.

We are in the final stages of selling a home for the same client and this bank has asked for commission to be cut to 4%. What little sympathy I had for banks and their policies has now completely diminished. Unless the sale is at 6%, No More Short Sales For Me!

I recently completed a short sale with Saxon. Don't want to get into all the nightmare regarding it but to the point on this post, the commission on the listing agreement was 6%. When I got the short sale approval term letter, without discussion, it had been reduced to 5%, the faxed term letter was only valid for 21 days and if we needed an extension, it would cost the agents another 1% of their gross commission. We exchanged emails and was given the understanding that if we did need an extension, it would be a pre diem of $150/day charged to the buyer. Of course, we didn't make the deadline, we went back for the extension and the curt response was okay for a 1% reduction of commissions. Could not get the negotiator to budge on this point so escalated to 3 higher ups and one actually responded and we got her to have this waived if could close within the next week. If not the 1% reduction would be reinstated. We did manage to get it closed with the extension so didn't have to test them again.

Rick Stuart

TONY: Two references pertaining to FHA guildlines on commissions:

In FHA guildines, US Department of Housing and Urban Development, Washington, D.C. 20410-8000, January 19, 2000, Mortgagee Letter 00-05, page 34 ,item P.Contract Approval 2nd paragraph 1st line item: " Sales commission (USUALLY 6% or less)"

In US Department of Houseing and Urban Development - Office of Housing Federal Housing Commissioner

OMB Approval NO. 2502-0464 (exp. 07/31/2009 Information /Disclosure Pre-foreclosure Sale Procedure: item J, page 12, items Allowable Settlement Costs, paragraph 1, line item 1. " Sales Commission CONSISTANT WITH THE PREVAILING RATE bu, not to exceed 6%."

I hope this clears up my earlier statement and helps. Fannie and Freddie show the same thing it seems. Having this information helps in deaing with the Short Sale/lenders negotiator and standing firm on your comm.

Quoting Tony Morales:

Quoting Peggy ONeill:

FHA guildlines say (up to) 6%

Ask for a supervisor - and stick to your 6%. Talk numbers and then let them do the talking

Hope this helps

Peggy, that is incorrect. only Fannie Mae and FreddieMac allow 6%

The information is correct: I responded, Aug. 28, 2009, to general discussion with quotations from 2 documents provided by HUD. Including all reference data to confirm information and quotations. You can call and request the full documents from HUD in your area or get their website information and down loan the informationn for your files.

Well, here it is with the approval letter and the terms and condition from Saxon. Because there was PMI , they tightened the screws and had Saxon reduce the commission to 3% total, reduced the seller consession to the buyer, gave Lendmark the second a token amount , which is off by about $8500 from what they demanded, along with the threat of a 1% reduction in commission if it didn't settle by the end of Sept.

Bottom line, is the second trust is refusing to take the token amount so without their approval it all goes to foreclosure.

Is there any creative way to make this work? There isn't $8500 in the transaction to give, other than the first trust giving a bit more, which they have said that it is etched in stone.

I do understand that with conventional insured non government loans that the commission can be tampered with as there isn't a control over those loans. The private mortgage insurers are the ones who ultimately are trying to keep their losses at a minimum, but perhaps they should have charges more upfront fees ! Instead, they take from those of us doing all the work. If something doesn't give, zero will be their income from this deal.

I'm curious. Those of us working short sales are trying to be part of the solution to the economic situation this country is in. We are helping homeowners and lenders, who are in trouble, by finding and closing home sales with a host of benefits to all involved. The only ones who we are hurting is the lawyers and home preservation companies.

It's unbelievable to me that a lender is working to cut our pay when we are the ones who are helping them, and the mortgage insurance companies, save a boatload of money!

What would happen if, when the lender of MI company says that they will only pay 5% or OMG 3%, we, as the quarterbacks of the deal said, screw it... you don't like my deal, then find your own. If you want the deal I'm bringing to the table, the commission is 6% fixed. If you don't want to pay that, then you are rejecting the deal.

I believe the lenders and MI people need us... need us badly. Why should we have to knuckle under because they don't want to pay us what we are due.

RaytheRealtor