No, I am not kidding.
I was just informed that a lender limited the compensation on a regular non-short sale transaction to a maximum of 8% of the sale price.
That’s right, sports fans, the lender….a well known national bank (who i will not name) got the request from a mortgage broker to close a loan. When they received the HUD from the title company, they funded it less the difference between the real estate agents total compensation and 8%.
OK, welcome to the mortgage brokerage world where by the Dodd-Frank Act, mortgage originators and especially mortgage brokers (and not the banks themselves) are limited in what they can make and how they have to disclose it.
I would assume that the bank felt that commission over 8% was a detriment to their collateral, but there was a contract between the seller and the agents. The bank intervened…..and basically said to the agents (to put it nicely) go jump in a lake!
OK, what should you do know. First, contact your Senators and Congresspeople and the candidate for said offices in 2010 and demand the repeal of the compensation limits and HVCC-like parts of Dodd-Frank. Then, call NAR and let them know what just happened so that the dues you pay can go to righting a new wrong.
After that….drink heavily (but don’t drive!).