Hello all and happy Holidays.


Is the buyer entitled to see a copy of Fannie Mae approval letter??  I feel like before going forward with home inspection and such that a copy of the approval should be provided.


My daughter is involved in purchasing a short sale in Green Bay, WI .  Offer submitted at $140,000.00  and offer was accepted in May.


Loan package was submitted (finally) to Fannie Mae in November and it was rejected with Fannie Mae saying they wanted $170,000.00 for the home and my daughter does not come close to being qualified to purchasing at that price.


Realtors told my daughter it was simply a formality to resubmit at $140,000.00 and Fannie would approve.  Paper work was updated (amendement to offer extending closing date, etc.) and Fannie rejected again at beginning of December saying they want $170,000.00.


My daughter asked for her earnest money back and several days later the realtor contacted her saying Fannie had approved sale at $140,000.00.  The realtor wrote another amendment extending closing to 12/31/2012 and instructed my daughter to order home inspection which my daughter must pay for ($300.00 cost). 


My daughter has asked several times to see the Fannie Mae approval letter as has her lender and the realtor keeps putting both of them off.  My daughter is only trying to be sure she does not incur an unneccesary inspection fee. 


In addition sellers of the home have now had to vacate due to foreclosure and home was winterized which Realtor just told my daughter on 12/14.  And my daughter was told by realtor that she must pay to have home de winterized which must be done before inspection.


Thanks in advance for any advice



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The " simply a formality" to resubmit at 140k when FNMA countered at 170k is garbage. Absolutely you need to see the approval letter, not redacted other than personal seller info. Something smells. They had to move out due to foreclosure?????? Something smells. Have your Realtor find out if there is an auction date scheduled. I would pull the plug, unless the owner added your realtor as an authorized party to full access, and your realtor would know exactly what was going on.


Thank you so much for your advice.


  I too told my daughter to get out too but we are not sure if she can because she signed an amendment to the offer extending closing to 12/31/2012.  Doesn't a contingency (contingencies) have to not be met in order to walk?   In other words she would want her $1000.00 earnest money back but she does not want to end up in court for breaking a contract.

I assume your daughter wants it if the approval is real. Verify this first. If there really is no approval, the contract should have an automatic date where the contract would be void if no approval had been obtained, or a date where buyer could void the contract. I assume these dates have passed, from the time lines. Also again, an owner Never has to move out simply because the " house is in foreclosure". Also, a listing agent should have NO issue in providing the approval letter, with minimal redaction.

Normally....whatever normally IS in short sales...we would say...no....the buyer is not entitled to see the approval...lots of what you are saying sounds like there are more problems here than you may know...First of all Fannie doesn't drop prices in an instant....if the house is a short sale...the sellers did not have to vacate the house...We are Wisconsin licensed realtors with a specialization in short sales ...happy to answer your questions. I would ask to talk with the agents manager and let him/her know of your concerns.


Your daughter is not privy to this information, however, her title company is.  The seller's agent should have sent a copy of the approval letter to the title co or your daughters lender and they can tell her whether or not it was approved for the $140,000

Or as Wayne suggested if the seller's agent wants to provide a redacted copy that may be a possibility.

OMG!  This really stinks to high heaven!!!  Your daughter's contract should be contingent upon short sale approval and, as such, she would have the right to get her money back as soon as FNMA rejected her offer!!!  And, if FNMA said $170,000 was the price, trust me, there is no way in hell they just suddenly dropped to $140,000.  If they have a short sale approval, the contract should somewhere specify that they are required to provide it to the buyer.  There is no way the buyer's title company will insure the title without some proof from the bank that they accepted less than the full amount for their loan payoff, so they have to provide it to the buyer's side.  Your daughter should file a complaint against this agent with the real estate commission.  Those are words no agent wants to hear.  Go to the broker first, then if they won't help, go to the commission.  That'll fix it.

Buyer is not entitled to a copy of the approval letter it a violation of the privacy act and the Gramm Leach Bliley Act. look at some of your previous approvals from Bac and it talks about those two acts.

The buyer's mortgage company absolutely needs the short sale approval letter in order to get a final mortgage commitment and clear to close.  The fact that the bank approved the short sale is public knowledge and the seller has no right to privacy concerning that.  How is the title to be cleared if no one can prove the bank accepted less than what was owed on the property?

No, the short sale approval is a private agreement between the seller (actually the borrower) and the lender.  Since the short sale approval letter can contain promissory notes and other information that a seller may want to keep private, there are legitimate reasons to not share the approval letter with anyone other than the title company.

On the other hand, the agent handling this short sale has already indicated that they have no clue so I would demand the approval letter, or instruct the buyer to seek legal counsel to get out the contract.

I'm not sure where you are located...but a short sale approval is not public knowledge. It is a demand statement from the lender.

On my transactions I lay all the cards on the table. I want the buyers agent, buyers and their lender to know specifically when we have to close by. The closing date is the most important date once the approval is given. If the approval letter stated personal information such as a note, contributions, social security number, etc., I would black out the information on behalf of my clients before handing it out to all parties.

Sorry, I didn't mean public knowledge like it's broadcast on the Internet.  In New Jersey, the title company requires the short sale approval letter in order to insure the title.  The buyer's mortgage company also requires the short sale approval letter in order to give the buyer a mortgage.  The agreement of sale is contingent upon short sale approval, so the listing agent must provide proof that the short sale was approved.

Where is this Act does it mention anything about Real Estate Short Sales?



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