April 15, 2024

C.A.R. releases commonly asked questions document
C.A.R. has received many questions about NAR's proposed settlement of the antitrust class action lawsuits brought on behalf of home sellers related to broker compensation. The settlement is subject to final court approval; however, because the release of claims extends through the date of class notice, NAR will be putting practices changes in place in late July to avoid any gap in the release of liability. Here are answers to some of the most commonly asked questions (must be signed in to access).
 

April 15, 2024

Fannie Mae clarifies interested party contributions

Fannie Mae received numerous inquiries concerning the proposed settlement agreement entered into by NAR in the Burnett et al and Moehrl et al cases, subject to court approval.

Fannie Mae's Industry Letter addresses the current treatment of property seller-paid buyer agent fees under its interested party contribution requirements.

Interested party contributions

In Guide Section 5501.5, property sellers are permitted to make financing concessions toward the Borrower's Closing Costs in maximum amounts between 2% and 9% of the property value. Fees or costs customarily paid by the property seller according to local convention are not subject to these financing concessions limits. Buyer agent fees have historically been fees customarily paid by the property seller or property seller's real estate agent, and, as such, they are currently excluded from these financing concession limits. If these fees continue to be customarily paid by the property seller according to local convention, they will not be subject to financing concessions limits.

It is Fannie Mae's standard practice to continuously evaluate its requirements to determine whether updates are appropriate based on changes to the market and industry. Fannie Mae will continue to monitor and assess the impact of the proposed NAR settlement and other real estate agent commission lawsuits to determine if any updates to its requirements are necessary.

REALTORS^® who have questions about the content of this Industry Letter, please contact your Freddie Mac representative or call the Customer Support Contact Center at 800-FREDDIE.

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April 12, 2024

Judges rule against consolidating commission lawsuits

This morning, the Judicial Panel on Multidistrict Litigation rejected a request to centralize in Kansas City many cases around the country challenging rules regarding buyer broker compensation. The Court decided to wait and see if the settlement is approved and how many claims or cases remain after the settlement approval process. This decision did not address whether the settlement should be approved.

The settlement approval process will continue. The likely next step in cases against C.A.R. will be for the parties and courts to determine whether the cases will go forward while the settlement approval process is playing out.

NAR is pleased with the ruling. It reflects that NAR's settlement, which, if approved by the court, would end litigation nationwide for NAR and other released parties in the cases brought by home sellers. NAR stressed that the ruling does not affect the approval process for the settlement agreement.

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April 5, 2024

Appeals Court Allows DOJ to reopen antitrust investigation into NAR

An appeals court has ruled that the Dept. of Justice can reopen its investigation into NAR. Several years ago, the DOJ began an investigation into NAR's cooperative compensation rule, and the parties agreed to a proposed settlement in 2020. However, the DOJ then withdrew from the settlement in 2021 and sought to reopen the investigation. NAR sued to prevent the DOJ from doing so, and on April 5, an appeals court ruled in favor of the DOJ, allowing them to reopen the investigation.

NAR has stated that this ruling in the DOJ investigation does not affect the settlement agreement that NAR announced on March 15 in the class action litigation to resolve nationwide litigation over claims from home sellers related to broker commissions. NAR has not indicated whether it will appeal this ruling.

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March 15, 2024

NAR reaches agreement in claims brought by home sellers

The National Association of REALTORS® (NAR) today announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. The agreement would resolve claims against NAR, over one million NAR members, all state/territorial and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.

The settlement, which is subject to court approval, makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule) that was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation. Under the terms of the agreement, NAR would pay $418 million over approximately four years.

NAR's full announcement.

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RESOURCES:

C.A.R. Commonly Asked Questions (Created April 15, 2024) - (must be signed in to access).

C.A.R. Legal FAQs – (Updated April 12, 2024) - (must be signed in to access).

NAR's REALTOR® Magazine Special Supplement – (Updated  April 11, 2024)

NAR Settlement FAQs – (Updated April 4, 2024)

NAR Settlement Financing FAQs – (Updated April 4, 2024)

C.A.R. Legal Quick Guide - (Updated March 29, 2024) 

Visit Smart Zone for Buyer's Agent Resources and other NAR litigation resources, including information about using the Buyer Representation and Broker Compensation Agreement (C.A.R. Form BRBC) and their use in real estate transactions.

Article belongs to CAR.org