The


National
Association
of
Realtors
(NAR)
urged
the


U.S.
Department
of
Veteran
Affairs
(VA)
to
revise
its
policies
that
ban
veterans
from
paying
broker
commissions,
an
issue
that
is
gaining
attention
following
the
NAR’s
landmark

$418
million
settlement. 

Earlier
this
month,
the
NAR
announced
the
settlement
of
various
lawsuits
filed
by
home
sellers,
which
allege
that
the
real
estate
industry
colluded
to
keep
agent
commissions
artificially
high
at
5%
to
6%
of
a
home’s
sale
price.

With
the
settlement,
NAR
agreed
to
abolish
its
“Participation
Rule”
that
required
listing
agents
to
make
an
offer
of
compensation
to
buyer
brokers.

But
the
VA’s
current
policies
place
veterans
at
a
“significant
disadvantage”
compared
to
other
buyers,
NAR
President
Kevin
Sears
said
in
a

letter
submitted
Wednesday
to
John
Bell,
executive
director
of
VA’s
Loan
Guaranty
Service.

The
VA
rule
states
that
a
borrower
using
a
VA
loan
cannot
pay
fees
or
commissions
to
a
real
estate
agent
unless
determined
“by
the
Under
Secretary
for
Benefits
as
appropriate
for
inclusion
…
as
proper
local
variances.”

The
currency
policy
will
put
VA
buyers
on
the
sidelines,
especially
in
a
market
with
already
tight
inventory,
Sears
pointed
out.

“In
situations
where
no
offer
of
compensation
is
offered
from
a
seller,
VA
buyers
are
immediately
at
a
disadvantage,
potentially
forcing
them
to
forego
professional
representation,
lose
a
property
in
an
already
limited
inventory,
choose
a
different
loan
product,
or
exit
the
market
entirely,” Sears
wrote.

The
VA
didn’t
immediately
respond
to
HousingWire’s
request
for
comment.

NAR’s
letter
follows
a
similar
message
sent
by
the

Community
Home
Lenders
of
America
(CHLA)
to
the
VA
earlier
this
week.

In
a

letter
submitted
to
Bell
on
Monday,
the
CHLA
called
on
the
VA
to
expedite
regulatory
change
that
would
allow
veterans
and
active-duty
service
members
to
fund
buyer-broker
commissions
when
purchasing
a
home
with
a
VA
mortgage.

An
official
from
the
VA
previously
told

HousingWire
that
the
department
is
working
closely
with
the

Department
of
Justice
(DOJ)
to
determine
any
potential
implications
for
veteran
borrowers
and
is
committed
to
ensuring
that
veterans
are
neither
disadvantaged
in
the
homebuying
process
nor
overcharged.

“VA
is
actively
engaged
with
the
Department
of
Justice
to
review
the
potential
implications
and
evaluate
how
VA
can
best
ensure
that
VA’s
home
loan
program
remains
an
attractive
option
for
Veterans
in
the
homebuying
process,”
the
official
said
on
Monday. 

Concerns
over
the
existing
VA
policies
have
been
echoed
among
mortgage
professionals.

VA
borrowers
will
be
the
hardest
hit
if
they
have
to
shoulder
buyer-side
commissions,
said
Jon
Overfelt,
director
of
sales
and
principal
at

American
Security
Mortgage
Corp.

“VA
loans
are
probably
the
best
loans
on
the
market.
They’re
100%
financing,
they
don’t
require
a
downpayment
and
the
guidelines
are
tilted
toward
helping
the
[borrower]
get
in
the
home,”
Overfelt
said.

“I
would
hope
something
would
come
of
that
because
these
people
fought
for
our
country,
right?
They’ve
earned
the
right
to
have
that
VA
loan,”
he
added.

If
cooperative
compensation
is
banned,
the
VA
must
weigh
in
to
develop
or
accept
a
mechanism
for
VA
borrowers
and
how
to
pay
the
buyer
agent’s
commission,
said
Ryan
Grant,
co-founder
and
division
president
of

Neo
Home
Loans. 

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