Is Freddie Mac Going to Forbid the Payment of Short Sale Negotiation Fees?
Monday, November 28, 2011 at 10:23AM New rules appear to forbid the payment of short sale negotiation fees.
November 22, 2012
Nash Law Firm, PLLC
By: Stephen J. Nash
nash@nash-law.com
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Along with the new "arms length" affidavits, the new Freddie Mac regulations effective January 1, 1012 
appear to ban short sale negotiation fees both out of the sales proceeds or directly from the seller.
If this new requirement is enforced, anyone expecting to get paid for negotiating short sales will be in for a surprise. Eventually, sellers with Freddie Mac mortgages will have to negotiate on their own or hope that someone will do so for free.
In Freddie Mac’s most recent update to their short sale guidelines, the following was included:
■ Providing that short sale negotiation fees must not be deducted from the proceeds
of the sale or charged to the Borrower
While I have not ready any article addressing this provision, on its face it would appear that Freddie Mac is attempting to prohibit short sale negotiation fees from being paid on any short sale involving Freddie Mac. Not only does it state that a short sale negotiation fee cannot be deducted from the proceeds of the sale, it goes on to state “…or charged to the Borrower.” I can only assume that the borrower in this case is their borrower – the seller. If so, this provision would effectively ban a short sale negotiation fee from being paid on Freddie Mac files.
The provision does not become effective until January 1, 2012 but servicers may begin to impose the new guidelines prior to the effective date.
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