Many real estate agents were on the verge of having real estate deals ripped right out of their hands. That’s because the U.S. Department of Housing & Urban Development recently announced it would no longer allow dual agency agreements in FHA pre-foreclosure transactions. Dual agency occurs when the Realtor represents both the buyer and seller in a real estate transaction. In essence, the Realtor becomes a neutral party.
The change, which was due to go into effect on October 1, 2013, would include the many short sale transactions currently underway in Las Vegas and throughout the country. The National Association of Realtors (NAR) immediately went to bat and began talks with HUD officials on the proposed change. So this past Wednesday, HUD announced a decision to reissue the July Mortgagee Letter and remove all dual agency language. That means the dual agency policy will not go into effect on October 1. Meanwhile, NAR will continue speaking to agency officials concerning a solution to the dual agency issue.
The change was initially proposed by HUD in response to fraud and abuse the HUD Inspector General discovered in some pre-foreclosure sales. NAR issued a letter to HUD addressing concerns about the policy and how implementing it would have a disruptive effect on communities across the nation.