Recently, Fannie Mae began to actively seek out brokers listing more than 30 REO listings from any single Fannie Mae source which understandably is seeing opposition by many large brokerages as well as the National Association of Realtors, according to Keller Williams’ CEO, Mark Willis.
Willis wrote this week to all of Keller Williams associates:
“Dear Associates -
We’ve recently been alerted to heightened enforcement from Fannie Mae of a per-broker limitation of 30 active REO listings from any one Fannie Mae source, and want to assure you that we have been diligently working behind the scenes on your behalf to address this issue.
While we understand that this policy is designed to curb abuses and ensure that all Fannie Mae-backed REO listings receive the necessary attention to detail, we were quick to point out to Fannie Mae’s leadership that the real estate industry’s most efficient REO specialists have invested heavily in people and systems. As we all know, efficient disposition of REO properties is critical to reestablishing stability within the real estate market, and it serves no one to severely curtail the operations of the most successful producers who understand the high-volume, low-margin nature of the REO business.
We also want to dispel the rumor that the National Association of REALTORS is in support of this limitation. Our sources at NAR have indicated that they share our conviction that top-producing REO agents are an integral part of the solution, and that dismantling their businesses in the interest of opening the field to more players serves no one.
Click here to find the letter that we have sent to the President and CEO of Fannie Mae that outlines our position. We look forward to working closely with Fannie Mae in promoting the highest standards quality and professionalism, and will keep you in the loop as this matter develops.
Yours in leading the way,
Mark Willis
In a letter to Fannie Mae, Willis wrote, “We are very concerned that due to the high volume, low margin nature of the REO business, the imposition of these limitations would serve to drive real estate professionals away from the market to a greater extent than it would draw in well-qualified new players.”
“I was dumbfounded…”
A more strongly worded opinion was aired by Kansas broker, Chris Lengquist, “Frankly, I have to tell you I was dumbfounded that this rule was even in place! REOs are low profit, exasperating work. Professional real estate agents smart enough to put together a team of 3-8 people to review, list and successfully sell foreclosed property have to deal with governmental minions who need to leave by 4:30 each day because they cannot stand to work a minute’s overtime. Does it occur to Fannie that this is survival of the fittest?”
As a real estate professional, do you think it makes sense to make a rule that applies to the entire industry? Does raising enforcement help or damage the REO practice and real estate sector overall, or is this an appropriate measure? Tell us in comments your thoughts.
No sympathy here. Fannie just wants to make sure that the agents they have hired actually have the time to do the job properly. I’ve dealt with too many REO agents that have too many listings to care about any single one of them, particularly the ones at the low end of the price range. I would rather deal with an agent who *needs* something to close than an agent who figures *something* will close whether they deal with me or not.
Margin not high enough? I weep for you. Oh wait, that’s allergies.
This has been a prominent rule with several different banks since the government took them over. They found out over this last year that the new agents they were hiring that had no experience in REO management and disposition were way behind the curve (go figure) compared to those of us who have been here since before the meltdown really kicked in.
As stated in your post, those of us that specialized in the REO niche have had the time to develop the necessary systems, practices and procedures to manage and move the distressed properties. Some banks are beginning to thin the herd before the “next wave” hits. In the meantime, when I had 60+ listings, I had field people, buyers agents, office assistants, etc that I had to lay off when the REO inventory took a nosedive.
I guess Fannie is behind the curve. What chaps my hide is now that the government is involved in the banking industry, more and more I’m finding that the banks are giving preference to minority and woman-owned businesses when choosing the brokers that they are giving their listings to.
When REO agents were going strong there was (is) a lot of whining from other agents that didn’t get their foot in the door early and it isn’t fair that the banks only used a small group of agents. Since when is life fair? Why does government insist on mandating fair?
I’d better stop before my blood totally boils over. Good for KW for standing up against the BS that is simply another form of political correctness. This is real life, folks, not parks & rec baseball … We don’t all get a trophy.
Punishing the innocent. Kudos to Mr. Willis and the NAR leadership for standing up on this one. The one thing giving me some measure of hope is that HUD has reversed itself on other issues, and – although it takes time – hopefully we’ll see a similar reversal from Fannie Mae here.
Navy Chief, Navy Pride
I couldn’t disagree with you more. Setting a limit is a prudent measure in ensure quality and accountability. I’ve seen this process in action in my own office and firmly believe that the number set for the team is fair and promotes attention to detail so that there’s a system in place. The Realtor who heads the team also has an incentive to not only service those listings, but to turn them at such a pace that they receive a constant flow of new listings.
Thank you Mark Willis for staying in front of the curve and representing Keller Williams Agents best interests. Depending on the market, 30 REO listings can be a lot for one agent/team. Those that are trained and positioned to manage that many properties should be rewarded not penalized.
Ridiculous. Another example of people who don’t understand the problem throwing a rushed “solution” to make it look like they’re doing something. There are agents with 180+ listings who handle them all beautifully. There are agents with 2 listings who don’t service them well at all.
The #’s aren’t the problem.
Nice to see Keller Williams taking the lead…again!
As regulation, this is as good, and as bad, as any. Sometimes a limit of 30 is far too many, and sometimes that limit doesn’t make sense at all. Isn’t that the nature of government regulation?
This is the same government that thinks you can make too much money. And the government gets to decide what too much is. I don’t see this kind of rule being out of line at all with what we’ve been seeing out of D.C.
FINALLY – Hopefully FNMA will abide by its rules. If the rule is 30 listings per BROKER, then some of these Whale Brokers who have thousands of agents in offices spread across entire States might have to give up the stonghold they have. I have no sympathy for agents / teams who have “had to build infrastructure to handle the workload” and get paid minimally. If you don’t like the work – DON’T ACCEPT IT ! There are plenty of agents who will gladly accept the work, be thankful for it and do a great job. And many of us will not DOUBLE-END the transaction losing sight of the client. NO Broker shoudl get more than 30 Total REO listings, let alone, 30 FNMA Listngs.
Get over it.
If it was designed to curb the abuses, then abuses are likely endemic. “High volume?” Really? Where? “Low Margins?” Well then why bother? “Critical to re-establishing stability?” For who? Didn’t the NAR lobby government for the tax credit extension? You got more than stability …you got gains. Show me the arguments that support stability over corruption.
I’ve seen good and bad agents on both sides of the transaction spectrum. I think the focus should be on removing bad agents no matter how many listings they have. How it can be good for our business to allow some agents to have 50 or 100+ listings? I don’t go along with the argument that high volume agents are better and low volume agents are inexperienced. FNMA should enforce their own rules.