FHA Short Sale Dual Agency
Some NAR members have received communications from servicers, such as Bank of America, that dual agency is not allowed in FHA short sales transactions. This is not correct. The Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2013-34 at the end of September 2013, which delayed its proposal to prevent dual agency agreements in FHA pre-foreclosure transactions. HUD notified servicers of the change when the new Mortgagee Letter was issued.
HUD wanted to exclude dual agency agreements in short sale transactions starting October 1, 2013. Letters sent to HUD by NAR President Gary Thomas as well as by State and Local Association Presidents highlighted NAR’s concerns about the policy and the disruptive effect its implementation would have on communities across the nation. As a result, HUD has agreed to work with NAR to arrive at a policy that better addresses concerns that pre-foreclosure sales are not meeting HUD’s minimum net sales proceeds requirements.