Plaintiffs in an antitrust lawsuit that could shake up the real estate industry have subpoenaed mortgage giants Fannie Mae and Freddie Mac, sharpening scrutiny of real estate commissions nationwide.

The subpoenas were issued by the smaller of two bombshell commission lawsuits filed against the National Association of Realtors and real estate franchisors Realogy, Keller Williams, RE/MAX, HomeServices of America and HomeServices subsidiaries BHH Affiliates and HSF Affiliates.

The suit, filed on behalf of homeseller Joshua Sitzer and other plaintiffs in the Western District of Missouri, alleges that the sharing of commissions between listing and buyer brokers inflate seller costs and thereby violate the Sherman Antitrust Act, the Missouri Antitrust Law and the Missouri Merchandising Practices Act.

This and a bigger, related suit in Illinois on behalf of seller Christopher Moehrl seek to have homebuyers pay their broker directly, rather than having listing brokers pay buyer brokers from what the seller pays the listing broker. Such a change could upend the U.S. real estate industry by effectively forcing changes in how buyers’ agents are traditionally compensated. Both suits seek class-action status.

The defendants’ attempt to have the Sitzer suit thrown out failed in October. A similar attempt to throw out the Moehrl suit has yet to be decided by the court.

Meanwhile, attorneys for the Sitzer plaintiffs have filed a slew of subpoenas against Realtor associations, multiple listing services, MLS system vendor CoreLogic, consulting firm T3 Sixty, and now Fannie and Freddie.

The Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corp. (“Freddie Mac”) are government sponsored enterprises (GSEs) that purchase mortgages directly from lenders, guarantee that they will pay up if homeowners default, repackage the mortgages into mortgage-backed securities and hold them or sell them to investors.

In separate, nearly identical filings dated Feb. 10, the Sitzer plaintiffs are asking Fannie and Freddie to produce the following for the time period of Jan. 1, 2007 to the present:

  • Documents that show how they gather, retain and store data concerning residential real estate broker and/or agent commissions in the U.S., including data types and formats
  • Data for each purchase or sale of residential real estate and each actual transaction of real estate services in the U.S., including all terms of each transaction; property locations; all pricing information including sale price, rebates, closing costs, fees, taxes and financing type and terms
  • All information about broker and agent compensation for each real estate transaction in the U.S., including type, terms, source, amount, the amount offered in any listing and the amount actually paid, rebates, discounts or incentives; the currency in which the sale and the broker and agent compensation was billed and paid; whether the seller, buyer or anyone else who made an offer was self-represented; and the type and amount of any expenses or costs associated with the transaction and who paid those expenses
  • All documents and data reflecting broker and agent commissions and fees in residential real estate transactions, including but not limited to data compiled in the Uniform Closing Dataset, Closing Disclosures, Uniform Loan Delivery Dataset, or otherwise stored as a result of the Uniform Mortgage Data Program or any other program

The documents are due on or before Feb. 24. Inman has reached out to Fannie Mae and Freddie Mac for comment and will update this story if and when we hear back.

The Sitzer and Moehrl cases have attracted the interest of the U.S. Department of Justice (DOJ), which admitted in October that it sent a civil investigative demand to CoreLogic relating to a probe on real estate commissions and told the federal courts that NAR had inaccurately portrayed a 2008 consent decree between the trade group and the DOJ.

The DOJ said, contrary to NAR’s suggestions in legal filings, the decree did not approve any NAR rule or policy as pro-competitive. In response, NAR said it believed it had always accurately described the implications of the 2008 consent decree.

See the full subpoenas below:

Email Andrea V. Brambila
Like me on Facebook | Follow me on Twitter

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
We're giving away 3 free ICLV tickets at Connect Now next week. Register and attend live for your chance to win!REGISTER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription