Banks Charging 1% admin fee for short sale

I do a lot of short sales, but just recieved notice from American Home Mortgage that they require the buyer to pay a 1% admin fee to do a short sale. This is a first for me. Has anyone had this? If you have, is there a way around it?

I haven’t had it happen to me, but I would start making lower offers if it becomes a trend.

Never heard of that. Factor that into your total price. It sounds like this bank has incentive to avoid short sales.

Havent heard of it either… I do charge my end buyer a 1500.00 shortsale fee above the price of the deal and charge the lender a 1% shortsale fee to process the purchase plus the 6% real estate commission…

I agree it just a cost of doing business if they require the fee. No different than a loan fee from the buyers lender…

Yeah SLS is doing the same thing.

if the 1% doesn’t effect the deal too much - pay it and be done.

but like anything else - it’s negotiable. i love these banks - they’re making money all over the place from the government - and heck - AMH is defunct - they’re out of business. so what’s the 1% crap? they’re all washed up. don’t pay it - tell them to p*ss off.

SLS? Who dat?


The answer depends upon 2 criteria. First, the policy must be permitted by the secondary market investor who owns the loan. That ability must be in the loan servicing agreement between the servicing lender and the SMI. We determine that by finding out who is the holder in due course of the note and you can find that out through a pay service at

Next, they can only require that 1% if they have a company-wide written policy. We have had a couple of them attempt to do so, but they cannot just negotiate it. It has to be that consistently applied written policy. The reason is that we have protected classifications such as race, national origin, gender, religion and gender. Since they cannot ask questions to determine whether the borrower or you are in a class, they must not discriminate, so they must have a written policy.

We periodically get all kinds of varying requirements from servicers, but with careful and skillful questions, you may be able to determine if that is a written and absolute policy, or if certain negotiators are just trying to rip you off illegally.

I hope this is helpful to you.

Ken Lawson JD