In this video, real‑estate professional Leigh Thomas Brown explains a recent rule change announced by Fannie Mae and Freddie Mac that lets buyer‑agent compensation be rolled into a mortgage loan rather than treated as a concession. He outlines the background of a class‑action settlement that previously restricted sellers from allowing listing brokers to pay buyer agents, describes how the new rule works with a concrete $5,000 example, and clarifies how it interacts with other loan costs such as closing‑cost concessions and rate buydowns. Brown notes that the VA’s similar rule has not been updated and will require legislative action, urging viewers to contact their congressional representatives. He also offers practical advice for REALTORS® to discuss financing options with lenders, emphasizes the importance of professional representation for buyers, and points viewers to the official Fannie Mae news site for further details. The tone is conversational and instructional, with an enthusiastic endorsement of the rule change and a call to action for advocacy and continued education.
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Hey friends, you know, if I go live here recently, y'all are probably thinking, oh my gosh, what's happening? Because every day it feels like real estate's getting attacked more and more. And I haven't forgotten. I do know y'all want me to do a deep dive into the politics around real estate, and I will. I just have to get my mind right for it because there's so many layers to it. But today We have good news because yesterday afternoon Fannie Mae and Freddie Mac updated their rules and confirmed in their news release that buyers do not have to treat buyer agent compensation as concessions. Now here's what that means. If you are buying a house and you have saved up your down payment money and then you want to hire a buyer's agent, sometimes that buyer's agent will be compensated through the system which allows the listing broker All right, how do I explain this in a way that makes sense to regular people? It's very complicated, but it's very simple. Okay, a seller of a house on Elm Street agrees to pay a bucket of dollars to their listing agent. Traditionally, that agent says, okay, I'm gonna give part of the bucket to the agent working for the buyer so the buyer doesn't have to come up with cash. Well, class action lawyers wanted to make money off of good hardworking realtors, and so they didn't like our very efficient system.. And the DOJ does what every government agency likes to do and make things inefficient. And so they said, y'all can't do that anymore. And in real estate, we are always looking for ways that buyers can make their own choices and sellers can make their own choices because we're all about the free marketplace here in real estate. So what has happened is with the proposed settlement in this class action lawsuit against Real Estate, We can no longer publish to all of the world if a seller wants to allow their listing broker to use part of their dollars to compensate the buyer's agent. Well, sometimes they probably still will, but there's going to be occasions where a seller says, hey, I'll pay my listing agent, but don't you give a red dollar to anybody else. So the buyer will then want their own agent, which they should, because buying a house is complex. No matter what the media tells you about how you can click, click on Amazon for a house, how stupid would that be? And so the buyer says, I want an agent to help me guide through the process and know what I'm doing with my largest financial instrument. But if the buyer's dollars are carved out for down payment and they don't have enough money left to pay their agent and the house they're buying won't compensate them, then what's the buyer supposed to do? Well, 80% of the mortgages estimated in the US are backed by Fannie Mae and Freddie Mac. That's the government Government-sponsored entities, and these GSEs give security to the capital markets that it's okay, the government will back the loan, which is one of the reasons America has one of the strongest real estate environments and why property rights are so easy to get ahold of here. It's one of the foundational principles of this country that everybody can figure out their own path to property ownership, and you don't have to belong to the elite class to own real estate. Well, with all these rule changes, knowing that the government backs most of the mortgages, the new rule change as of last night is that if you're getting a loan that is backed by Fannie Mae and Freddie Mac, you can take the amount that you pay your buyer agent if you are a buyer and roll it into the deal. So for example, if you're buying a house for $300,000 and you've decided to pay your agent $5,000, You could finance $305,000 and that commission could be rolled into the note, which means the buyer pays it over time, but instead of coming up with $5,000, they can roll it in to the monthly payment at the prevailing interest rate. So that makes it affordable for the buyer, means the agent can be compensated, and everybody wins because that rule got fixed. And here's why the rule had to get fixed. Many of our buyers have already used up some of their dollars inside that note to pay for concessions. And what the concessions could look like is every loan has closing costs. There are fees associated with getting the loan, of getting the capital from the bank. And before you get mad about the banks getting paid, let me just remind you, if a buyer is putting 5% down, they're looking for a bank to give them 95% of the money as a loan. So the bank's going to have to process that information. The bank's going to make sure that their capital is well invested. And so before we get mad at the people who are loaning the money. Let's just make sure that we're all aware of the logistics here. Well, the banks are going to get their fees, and buyers have been able to roll those in as concessions. And in fact, in the interest rate environment we're in now, which is higher than it was 2 years ago, many of our buyers are using some of their available concession dollars to bring the rate down. That's called a buydown. It's not, not illegal. It's not like an adjustable rate mortgage. It just means you're paying a little cash up front to get the rate down from 6.75% down to 5.75%. So the payment is lower over time. It's just moving your fungible dollars around, and a good realtor and a great mortgage lender are going to work with every buyer on all the available options. Now, what this boils down to is the markets are responding to the changes that are necessary under these settlements, and that's good news. The other thing you should know is the VA has not moved yet, and it's not going to come from the VA, y'all. That rule has to be fixed through legislation. So if you want to be a part of the grassroots movement, send me a DM. This is not a comment thing. If you have a relationship with your congressman or woman, send me a direct message so I can help get your congressperson involved with this grassroots effort to fix the VA rule before all of the MLSs have to make these changes in July.. And also, if you want to keep up to date on news and not just have to look for a video from Leigh Thomas Brown, for Fannie Mae information, they give you the website and somebody can type it into the comments because I can't type and talk. That is where you're going to go to. It's not easy to domain, of course, singlefamily.fanniemae.com. That's F-A-N-N-I-E-M-A-E, singlefamily.fanniemae.com. You can see the news there. You can subscribe for news. Your great lenders are probably going to send this to you as well. Several of my lenders did send me the information. Hey friends, but I'm a nerd. I was reading it anyway. And by the way, I do know that some of y'all want to know where you can get good real estate news that is fairly unfiltered and unbiased and where you can understand the economics and the politics around real estate. I will be dropping a video on that as well. So always let me know what you need. I've got way too much information for any one message at any given time because I'm a nerd. Hey, It was a slam on me in school, but now it's a benefit. So thank you, Fannie Mae, Freddie Mac. Thank you, banks. By the way, if you— thank you, Joyce. If you are a REALTOR®, I will say right now, the most important thing you can be doing right now on a day if you're not out showing property or listing a house, talk to your lenders about all of the available options for your buyer clients to figure out how they can come up with your compensation if they don't have available cash. I know that our buyers value us. I know that they need professional representation. One of our jobs right now is to make sure they know every available avenue to compensate us if they're not Rockefellers made out of money. And that's what we're doing right now as we continue to push for changes to make sure that real estate is transparent and most importantly available to every neighbor in every zip code. Because until everybody that wants the American dream has it This girl's not giving up. Thanks, guys. Share this video with a real estate friend, and I'll see you around.
