REALTORS® had reason for concern after the United States Department of Housing and Urban Development would implement a new policy on October 1, 2013, preventing dual agency agreements in FHA pre-foreclosure transactions. The National Association of REALTORS® immediately began talks with HUD officials on the proposed change. On Wednesday afternoon HUD officials reported to NAR that they would reissue the July Mortagee Letter (#2013-23) and remove all dual agency language. The result is that the dual agency policy will not be implemented on October 1st, allowing NAR to continue the dialogue with agency officials on a formal solution to the dual agency issue. HUD proposed the policy change in response to fraud and abuse detected by the HUD Inspector General in the pre-foreclosure sales process. Had this policy been implemented, if an office chose to list a short sale, none of the other agents in that brokerage could bring a buyer to that property. This would have a significant impact on real estate brokerages, and families in need of a short sale. This would have had a tremendously negative effect on both large urban areas where hundreds of real estate agents may work for the same brokerage, and rural areas where there are fewer brokerages available. NAR feels there are other ways that HUD could address concerns about the short sale process without restricting such a significant number of real estate agents from participating in pre-foreclosure transactions. For instance, Fannie Mae allows dual agency on short sales. To combat fraud and maximize profits, Fannie implemented a recent policy that requires all properties being considered for a standard short sale / HAFA II recommendation to Fannie Mae for review, or approving the standard short sale / HAFA II. The property must be listed on the applicable MLS which covers the geographic area in which the property is located and a printed copy of the property’s MLS listing must be kept on file. If a property is located in an area that is not covered by an MLS, the property must be advertised in a manner customary for that real estate market for at least five consecutive calendar days, including one weekend. Fannie Mae also provides an Anti-Fraud Partnership Training series as well as a contact number and email for anyone to report potential short sale fraud.