HomePath and the REO Listing Limit: What Say You?

By
Real Estate Broker/Owner with Broadpoint Properties Cal BRE #01324959

Fannie Mae REO Listing RestrictionsI love to park on the sideline and watch heads roll. That's what I've been doing with HomePath and Fannie Mae. But, finally, today, I've decided to put my car in drive.

Have you been following the saga of HomePath (the Fannie Mae division that managers the inventory of Fannie Mae owned homes) and the restrictions imposed on the number of listings assigned to individual brokers? 

Apparently, last month, HomePath issued an REO Announcement that imposed a limit of 30 on the number of REO listings that a broker of record could have at any time. According to various online sites including www.realtoractioncenter.com, "the announcement warned companies that handle Fannie's REO inventory to apply the 30-property limit strictly and noted ‘100% compliance' was expected."

The Realtor® Action Center website further reported that NAR immediately heard from members raising concerns about the impact of such a low, arbitrary limit on their businesses. The report stated that "NAR agrees that Fannie should not have an inflexible limit on the number of REO listings. Instead, Fannie should rely on documented success and professional performance of real estate brokers."

On July 9, HomePath released another REO Announcement that relaxed the rules announced at the end of June. "The July 9 announcement states that Fannie Mae, as a general rule, does not allocate more than 30 active REO listings from any one Fannie source at any one time. It stated this has been long-standing practice. The new announcement went on to acknowledge that some higher-performing brokers can handle more than 30 properties at one time and still exceed Fannie's standards.  Accordingly, Fannie Mae will approve special exceptions to the 30 listing limit in appropriate circumstances. In addition, the Announcement notes that the 30 listing limit is applied per source, so brokers may have 30 properties directly from Fannie and 30 from an outsourcer, without requiring Fannie approval. More information is expected soon."

I'm sure that Realtors® have strong opinions both for and against this issue. On the one hand, many of us live in communities where individual Realtors® were assigned well over 100 REO listings a few years back. This massive influx caused some of those Realtors® to devise systems which limited contact with the public and encouraged a less personal approach to real estate. On the other hand, many might argue that if you are intelligent and organized enough to manage a large influx of REOs, why not be permitted to take on such a large assignment? It is also notable that the commission is not great on REO listings; many Realtors® find that they earn the best REO income by developing a large REO department.

I'd love for you to weigh in and share what you think about this. It is certainly a hot button topic. The goal of this post is to generate a conversation, and I hope that it will accomplish that goal.

I know of one crew who is clearly against the policy... That's the crew at Keller Williams. Thanks to Lani Rosales' post on Agent Genius, I was pointed to a letter written by Mark Willis, the CEO of Keller Williams to the President and CEO of Fannie Mae.

So, what do you think about the policy?

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Rainer
201,577
Mary Macy
Top Agents Atlanta Metro - Roswell, GA
Top Agents Atlanta Metro

I would love to get just one homepath listing.  I have been selling real estate for over 25 years, have credentials as an asset manager in the largest mortgage company at the time in the US and I still cannot get into the system.  I would settle for 5 reo listings right now from homepath.  The system is really at a loss for hiring great brokers and distributing the business.

July 29, 2010 10:57 PM #1
Ambassador
1,332,355
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Melissa,

"a less personal approach to real estate" is very nicely said. I run into situations where they send a company to change the lock, send someone to take a picture, and never visited the property, and have no clue off the view, and any other issues

July 29, 2010 11:00 PM #2
Rainer
39,820
Sheila Rasak
Keller Williams Realty-California Coast Property Group - Camarillo, CA

Melissa,

A very thought provoking blog indeed! Yes, it's a hot button, but unless fully prepared to take on REOs, I feel it's best that the guidelines stand at approximately 30.

As far as I can see it, the thirty listing rule merely implies that no one Realtor will have more than thirty REO listings from any one lender in the pipeline at a time. As each listing is closed, another listing is then granted to the Realtor.

I know of one Realtor who has the ear of a certain large lender and manages to earn somewhere in the neighborhood of $500,000 on an annual basis with her 30 listings in the pipeline. She works hard and she works smart, but just how many more listings can she service with the competence and dedication she has now realized?

October 07, 2010 10:34 AM #3
Rainer
113,914
Julie Nikolaou
RPM Homes, LLC - Appleton, WI

It would be nice if the limits would be followed.  What would also be nice is the agents to do get the REO listings were competent professionals all the time.  I can't tell you how many times I have worked on their listings by myself with no help from them to get them to the table, yet I can't seem to get my foot in the door.  Sure wish you could call the asset managers and let them know it is not the listing agent sometimes that sells their homes, but rather the listing agent that stands in the way and should forfeit their next listing to the people selling them.

February 26, 2011 11:09 AM #4
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Melissa Zavala

Broker, Escondido Real Estate, San Diego County
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