this U.S. Department of Veterans Affairs Veterans Affairs officials announced Tuesday that they will soon issue a notice to “close the gap” in agency law that prohibits Veterans Administration buyers from paying real estate agents.
Michelle Corridon, deputy director for policy at the Department of Veterans Affairs, announced at the meeting Mortgage Bankers AssociationThe announcement will be made at the Secondary and Capital Markets Conference in New York between now and June 12.
Department of Veterans Affairs policy states that while veterans can use VA loan benefits to purchase a home through a buyer’s agent, “under no circumstances may brokerage fees or commissions be charged for the services of such individuals.”
This policy will be a problem for veterans who want to use VA loan benefits under VA terms National Association of Realtors (NAR) Commission Litigation Settlement Agreement.
Under the terms of the NAR Settlement Agreement, listing brokers are not allowed to provide buyer’s agents on the MLS with a blanket compensation package, and buyers will be required to sign a buyer’s representation agreement outlining the fees they will pay the agent for their services.
Despite these changes, the practice of cooperative reimbursement may continue, but industry trade groups are concerned that some sellers will choose not to offer any reimbursement, which will negatively impact many homebuyers, especially veterans.
MBA stressed in a letter to the VA that senior borrowers will be disadvantaged if they lack the ability to compensate real estate agents.
“While market reaction to the settlement remains uncertain, one thing is clear: experienced borrowers will be significantly impacted by this ruling,” the letter said.
In a statement released Tuesday, the MBA said it welcomed the VA’s move.
“As we have emphasized before, without action, VA buyers will be severely disadvantaged, especially in today’s inventory-tight market,” the statement read.
NAR is also advocating that the VA change its regulations regarding buyer’s agent salaries. NAR did not respond to a request for comment.
