The U.S. Department of Veterans Affairs (VA) plans to issue a circular before June 12 in the wake of the National Association of REALTORS®’ (NAR) historic settlement, with hopes to “bridge the gap” on the buyer commission prohibition between buyers agents and veterans.
Department of Veterans Affairs Deputy Director for Policy Michelle C. Corridon announced Tuesday at the Mortgage Bankers Association (MBA) Secondary and Capital Markets Conference and Expo that the VA views this circular as a temporary place holder in the midst of a formal rulemaking process, temporarily dismantling the regulations that prohibit veterans from paying their own commissions to agents and brokers when using VA home loans.
“We knew that at some point that we want to protect veterans as much as possible,” Corridon told National Mortgage News. “We want them to be able to exercise their right in the marketplace to buy a house.
“That’s the heart of the circular, and then we will start rulemaking, and that’ll be the full set of rulemaking, proposal, comment period,” she added.
The MBA has pushed for these rule changes for months, and previously issued the following letter to the VA:
“As we have previously stressed in our discussions on this issue, MBA urges the VA to amend its regulations to allow Veteran borrowers to pay reasonable and customary fees and commissions to retain agents that will represent their interests in the transaction,” the letter noted. “If the VA believes it must go through the rulemaking process to amend its regulation, MBA recommends that the VA release an Interim Final Rule to ensure that veterans seeking to use their VA benefits remain competitive throughout the comment period and rulemaking process.”
NAR has also met with VA officials and lawmakers to push for change, working to ensure that veterans had access to agent representation in the home-buying process.
“NAR launched an all-hands advocacy effort on this issue, meeting with VA officials, engaging with lawmakers and rallying our industry partners to ensure this prohibition was lifted,” says Shannon McGahn, NAR’s chief advocacy officer. “This is also a testament to the thousands of REALTORS® who came to Washington just a few weeks ago with a unified message. Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership. Taking this extra step ensures veterans have the same opportunity as others to compete in a tight housing market. We applaud the VA for recognizing this danger and acting swiftly to protect veterans.”
It was unclear when the VA would release a proposed rule or begin the formal process of amending regulations around buyer commission in VA loans. Often changing a rule requires several months, including multiple rounds of public comment or hearings and review by other government agencies.
