Over the last few months, it has become apparent that Fannie Mae is more interested in foreclosing than approving short sales. The scenario is the same over and over again. The BPO comes in at one price and Fannie Mae adds 20 or 30% and says that is what they will accept. Some have suggested that they are trying to get next year's prices if the current price trends continue. In the meantime, buyers are unwilling to overpay by that much and are backing out of the contracts when they hear the outrageous prices that FM is asking. If you dispute the value, they reject it and then consider their number good for an additional 90 days from the decision on the dispute. Has anyone else been experiencing the same kind of problem with Fannie Mae being the investor??
I couldn't agree with you more. A great example - I met the BPO agent who was very nice and knowledgeable. He placed a value of $100k in his report to the lender. We had an offer of $110k. The counter came a week later from the servicer at $155k. This is not a new listing either, This is on a property that we have had listed for over 800 days and have went through the motions with over 10 offers. Their value was $124k for the first 750 days and now all of a sudden in terrible location in FL, the property value has gone up $25k and is $55k over the BPO value. I have escalated all the way up with the servicer and all the way up with Fannie and got nowhere.
It just so happens that with this particular property that Fannie Mae has a homepath listing a few houses down and it's the same floor plan/size and is fixed up for $20k less. I'm sure that's what this house will be. No MI either, the issue is Fannie Mae. I have no issue with getting FMV offers approved on non Fannie Mae Investor properties.
Anytime we have tried to dispute value we get no where. When we submit a FHA appraisal to dispute, Fannie responds that this is just a matter of opinion and they're sticking to their BPO value. I have spoken to escalation contacts at a certain servicer and she advised that on ALL of their Fannie investor files that Fannie Mae raises the price 20-30% and in some cases 50% over the BPO value and are advised that it is NON negotiable. I've been in short sale for 4 years and closed many files and this is beyond frustrating and in my opinion criminal. They answer to no one.
The government needs to stay out of real estate. Come 2013 once the government/ALTA steps in even more and changes the HUD-1 again and the closing process to where the title companies will NOT work up the HUD-1, but the new lender will I don't see how short sale will ever work. That's my $.02 and my rant.
My buyers offered $150,00 (no concessions) on a home that was listed for $140,000. The lender countered with a $250,000 price!!! Nothing within miles of this home has sold for that price. I am almost certain that the lender is Fannie. My problem is that, while the listing agent is very nice, I do not believe he is aggressive enough. He keeps waiting for Equator to 'get back' to him and he is not sharing much info with me. Since I am simply the selling agent is there ANYTHING I can do to help the process along? It is frustraiting to work short-sales anyway but they are so much simplier when you have some contact with the decisions makers. Is there ANYWAY I can ethically contact Equator or the lender to see what the stall is?
I agree with Brent...if Fannie holds onto these properties long enough the values will go up and the government SHOULD stay out of real estate...actually the government should stay out of most things!
Linda, Equator is not a person so there is no one to contact, Equator is a "program" that the lenders use to process short sales. Without written authorization from the seller, you would not be able to talk to the lender.
Who is the lender in your short sale? There may be another way around...
Jeff: I have gone thru Equator a few times and there is always a way to contact someone who can get back to me. I just do not believe that the listing agent has been aggressive in his efforts to escallate. I have always been able to get someone to actually call me! I can get very little info because I do not have the authority. Tax records show Centex was the original lender that is why I suspect Fannie has it. I cannot look it up on the web site because I do not have the sellers last 4 SSs.
I honestly believe that they are holding offers until the market improves.....my question is: what happens when first time buyers get squeezed out of the market because of this? Are we back where we were? I REALLY would appreciate any help you can give me.
Linda no one from equator can help, it would be the lender that you would want to make contact with.
It is easy to find out who the lender (Servicer) is but not always easy to find the investor.
I agree they are projecting the market. They have no duty to your buyer in this instance so what happens to your buyer is they purchase a home they can afford? Not sure on that one
Here in AZ if we are being wronged by another agent; we go to their broker. Have you asked specifically what the agent is doing and has done. Who has he talked to? What was their response. You then have to judge the responses to what you would be doing differently. If you're buyer is financing his purchase, they would be lucky in AZ to have been selected to begin with. If the listing agent has explored all escalation possibilities, then you are up against the same brick wall as I am in my cases. No repercussions for anything FM does.
The whole point of this post is that Fannie Mae is countering with unbelievable and outrageous prices. Fighting these people is like trying to empty the ocean with an eyedropper. I can't say whether the agent in your situation is contacting the right people, but I know in my cases, I'm at the end of my rope and am trying to decide whether to go to the media to get the issue some press.
Mike: I am not certain about the media but maybe our local Representatives....especially those who supported the bailouts.
An agent in my office was having problems with a short sale. She contact our State's Attorney. Within 48 hours the servicer was on the phone with her and it was What do you need? Yes Ma'am. Contacting someone on the state level or federal level will probably get you somewhere.
I'm crossing my fingers. I have a FannieMae short sale that is being valued tomorrow. I pray that the value comes in within reason. I will let you know how it turns out.
Equator is a wall the negotiators and investors hide behind. There are ways to go around Equator. Call your congressman and get them involved. It works. :)
I think we need to bring this to the attention of the media and maybe we can get some answers from Fannie Mae on their current pricing logic. Everyone I have talked to is running into the same issues where Fannie Mae is the investor. This is what happens when companies don't have to worry about costs or profit. If they run out of money, they just ask the government for more and the current administration is more than willing to give as long as they get some of it back in campaign contributions. If FM runs out of money, they just go to Congress for some more. I wish I could spend money like a drunken sailor and know that there are no repercussions.
I agree. Then you have articles like this that come out that make the public think they're doing everything they can to help push short sales through and assist the homeowner. How can anything mentioned in this article matter if the values are WAY inflated by 20%-50% and you can never get a transaction closed?