Is buyer entitled to copy of approval from Fannie Mae
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
Replies to This Discussion
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Permalink Reply by joe beauchamp on
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Your real problem is that you don't know if you have a deal. Part of the problem is that you believe having an approval from fannie mae, which I have never actually seen, is proof that you have a solid deal. The listing agent will get an approval from the servicer (not the investor), but you can find enough agents complaining here and elsewhere that they had an approval then suddenly the bank sent a denial, changed the price, or the loan was service released to another servicer - without warning (I think I've had all three). The bank and the investor will take no responsibility for anything. So, you might be more comfortable to have in your hand the bank's approval, but that is not 100% safe. Your daughter will be taking a chance on any money spent on a short sale.
De-winterizing isn't tough - turn on the heat, turn on water, close valves and drains, light gas things. They just drain water (including water heater), open valves and put anti-freeze in sink traps and the toilets to winterize.
Currently, Fannie Mae is often being accused of jacking up the prices by 20% - you need to be concerned that your daughter is not being taken for a FNMA ride. That could well be where this funky $170K came from - kudos to whoever got it back out of the stratosphere, if that is what happened.
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Permalink Reply by Deborah Y Wilson on
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It is the strong feeling here that the approval letter absolutely be seen by the buyer and approved by the buyer as there are often terms that endure the closing that will affect not only the seller, but also the buyer. ie, no resale for 90 days which has to be a restriction put on the deed or recorded. OR the fees the lender will not cover that the buyer will have to pay in some cases. Naturally, the buyer needs to know this before agreeing to purchase the property as it is part of theterms to close and the condition of the title to the property they are purchasing. Information that the buyers agent or buyer should not have access to can be redacted prior to submitting it to the purchaser, but no purchaser should close on a short sale without having viewed the approval letter. If the commission is of concern, remember, it is the offer that is placed in your multiple listing service that determines what the buyers agent is going to get regardless of what is on the letter, so that should not be a concern. Other than the sellers privacy rights, there is no reason not to share the information and fully disclose any impact the letter may have on the buyer.
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Permalink Reply by Sue Irwin on
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Isn't your daughter being represented by her own Realtor or licensed agent? None of this should be happening.
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Hi As a buyer you are entitled to the short sale approval letter, it should be required by your daughter's lender anyway. As a listing agent I always send the buyers agent a copy of the approval letter as soon as it is received and then any future approval extension letters. Sometimes all of the details however are not on the letter but are sent as emails between me and the negotiator at the bank so sometimes it is difficult to keep the buyer's agent fully informed. However you do have the right to ask for the approval letter or any counter offer, changes or extensions that were sent by the banker to the listing agent and they should be agreeable to sending it in. good luck,Lauren Nemeschansky
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I usually run the approval letter by my seller clients before releasing them to the buyer, in case there is a problem with it. We have 3 days in California to provide the buyer with the approval letter from the time it is sent to the listing agent.
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I always provide a copy of the approval because it is now often a condition that needs to be met for the buyer's loan approval. If there is personal or confidential info about the seller, you can black that out, such as the loan number or ssns. There is no reason to with hold the approval letter.
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Permalink Reply by Joyce Shafer on
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The approval from the short sale lender is a seller contingency in the purchase contract. The buyer's lender must have a copy of the written approval because it is part of the contract; all mortgage lenders require anything that is a part of the contract to be furnished to them as a prior to doc condition.
Private information can be redacted but I would check with the buyer's lender before doing that.
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Permalink Reply by Stacy Gonzalez on
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I would advise your daughter not to have inspections until the written approval is provided unless he can forward direct email from the negotiator confirming that the short sale was approved and the approval letter will reflect the date of the email notice of acceptance. If the property is located in the state of CA, by law,it is the seller's responsibility to keep the utilities on.
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Permalink Reply by Lori Jeltema on
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Our short sale contracts say that the approval must be given to the buyer in writing. Has your daughter gone over her contract and all addenda? We don't know, of course, what is in her contract or what she has agreed to but if she hasn't consulted an attorney or at least gone over these matters with her agent, she should. I'm not sure if I caught it in your posts before but are these 'Realtors' you mentioned her agents or the seller's agent(s)? Either way, her lender and her attorney/settlement company are likely going to want to see these approval letters. The settlement company will be given directions by the seller's lender on how to properly execute the documents. Keep pushing your daughter to get the information she needs and good luck.
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