Mortgage accommodations
Mortgage veterans immediately raised concerns around affordability issues for prospective borrowers who can't afford any new cost burdens. The Federal Housing Administration was the first to address the uncertainty in late March, affirming that buy-side commissions are excluded from caps on interest party contributions. Those IPCs include concessions such as loan closing costs and rate buydowns.
The U.S. Department of Veterans Affairs in June updated its policy to remove a significant hurdle for veteran borrowers. Former guidelines restricted those homebuyers from paying commissions on VA loans; the new policy effective August 10 allows them to pay for "reasonable and customary" broker charges. The rule is temporary as the VA said it would establish a permanent policy through notice-and-comment rulemaking.
The U.S. Department of Veterans Affairs in June updated its policy to remove a significant hurdle for veteran borrowers. Former guidelines restricted those homebuyers from paying commissions on VA loans; the new policy effective August 10 allows them to pay for "reasonable and customary" broker charges. The rule is temporary as the VA said it would establish a permanent policy through notice-and-comment rulemaking.
Lingering concerns
The industry is "largely unprepared and overly optimistic" in its view that the NAR consequences will be limited, Keefe, Bruyette & Woods wrote in a June report.
The Mortgage Bankers Association said it will monitor the impact of the settlement. Industry veterans suggest homebuyers beyond the FHA and VA spaces will face affordability hurdles, and the changes will further exacerbate racial and economic disparities in homeownership. Such changes could subsequently cut the demand for starter homes and depress property values, David Dworkin, president and CEO of the National Housing Conference, wrote.
Lenders could see their agent referral partners dwindle, experts said. In addition, more professionals could pursue dual-employment opportunities or split compensation situations in coordination with a lending team.
The Department of Justice meanwhile menaces over the commissions changes, after a U.S. Circuit Court of Appeals in April allowed federal investigators to reopen a probe into NAR. The association last month petitioned for a rehearing in that case.
The DOJ already criticized the Nosalek settlement, calling the MLS's changes similar to NAR's "insignificant and largely cosmetic" while ignoring the larger problem of brokers steering clients to listings with larger commissions. It has yet to weigh in on the NAR settlement, although by law feds are allowed to voice concerns in pending class action settlements.
The Mortgage Bankers Association said it will monitor the impact of the settlement. Industry veterans suggest homebuyers beyond the FHA and VA spaces will face affordability hurdles, and the changes will further exacerbate racial and economic disparities in homeownership. Such changes could subsequently cut the demand for starter homes and depress property values, David Dworkin, president and CEO of the National Housing Conference, wrote.
Lenders could see their agent referral partners dwindle, experts said. In addition, more professionals could pursue dual-employment opportunities or split compensation situations in coordination with a lending team.
The Department of Justice meanwhile menaces over the commissions changes, after a U.S. Circuit Court of Appeals in April allowed federal investigators to reopen a probe into NAR. The association last month petitioned for a rehearing in that case.
The DOJ already criticized the Nosalek settlement, calling the MLS's changes similar to NAR's "insignificant and largely cosmetic" while ignoring the larger problem of brokers steering clients to listings with larger commissions. It has yet to weigh in on the NAR settlement, although by law feds are allowed to voice concerns in pending class action settlements.
