NEED HELP WITH THE FANNIE MAE/REO ADDENDUM

An investor making an offer on a Fannie Mae property, the listing agent has requested that a 13 or so page addendum be filled out by the buyer/investor to come with the offer before presenting it, is this correct? and since he is an investor, Fannie Mae's addendum states that he cannot sell the property for the next 120 days after closing, they call it a DEED Restriction. I thought I heard about something like this, not sure though. It sounds like all investors would have to sing this addendum when making /buying a Fannie Mae Property.Is this pretty standard?any input would help. Thanks.

 


Views: 2358

▶ Reply to This

Replies to This Discussion

Permalink Reply by Smitty on April 27, 2011 at 1:46pm
I thought it was 90 days but maybe it is 120.  I think you are limited to the 120 days unless you negotiate it out of the contract.  Push back and explain your buyer is fixing and planning on reselling the property.  It will be tough, but not impossible.  I have a friend who was able to negotiate it out of the contract.
Permalink Reply by Vanessa Calhoun on April 27, 2011 at 2:24pm

The 90 day flip rule was for properties being eligible for FHA financing. They did away with it, but most lenders now require two appraisals on a "flipped" property to ensure value. You can try to negotiate it out of the contract, but if there's an owner occupant offer that's near or higher than yours.......

Permalink Reply by Jeff Payne on April 28, 2011 at 2:32am
This is for Fannie REO properties, they claim that they try to encourage homeownership and lean towards selling to owner occupants.  I believe that the rule is that the investor can not sell for more than a certain % over the sale price withing 90 or 120 days.  I fired my Fannie Mae REO rep due to their stupid rules, won't list anymore Fannie Mae properties. 
Permalink Reply by Jeff Payne on April 28, 2011 at 2:50am

Is this what you are asking for?  I just sold a Fannie REO for $265,000 and this was part of the investor clause, not part of the owner occupied contract.


GRANTEE HEREIN SHALL BE PROHIBITED FROM CONVEYING CAPTIONED PROPERTY FOR VALUE FOR A SALES

PRICE OF GREATER THAN $_318000________________FOR A PERIOD OF__3____MONTH(S) FROM THE DATE OF THIS

DEED. GRANTEE SHALL ALSO BE PROHIBITED FROM ENCUMBERING SUBJECT PROPERTY WITH A SECURITY

INTEREST IN THE PRINCIPAL AMOUNT OF GREATER THAN $_______318000___________FOR A PERIOD

OF__3____MONTH(S) FROM THE DATE OF THIS DEED. THESE RESTRICTIONS SHALL RUN WITH THE LAND AND

ARE NOT PERSONAL TO GRANTEE.

Permalink Reply by KARLA ELKEBIR on April 28, 2011 at 11:14am
Thank You all for your quick and helpful replies. The investor has asked to have that clause(DEED) removed.. We'll have to see how it plays out with the asset manager.
Permalink Reply by KARLA ELKEBIR on April 28, 2011 at 11:22am
Yes,my office has the investor(buyer) and the selling agent was asked to have her buyer fill this form out before presenting offer. the investor is not agreeing to this clause. We'll see what happens. Thanks!

Jeff Payne said:

Is this what you are asking for?  I just sold a Fannie REO for $265,000 and this was part of the investor clause, not part of the owner occupied contract.



GRANTEE HEREIN SHALL BE PROHIBITED FROM CONVEYING CAPTIONED PROPERTY FOR VALUE FOR A SALES

PRICE OF GREATER THAN $_318000________________FOR A PERIOD OF__3____MONTH(S) FROM THE DATE OF THIS

DEED. GRANTEE SHALL ALSO BE PROHIBITED FROM ENCUMBERING SUBJECT PROPERTY WITH A SECURITY

INTEREST IN THE PRINCIPAL AMOUNT OF GREATER THAN $_______318000___________FOR A PERIOD

OF__3____MONTH(S) FROM THE DATE OF THIS DEED. THESE RESTRICTIONS SHALL RUN WITH THE LAND AND

ARE NOT PERSONAL TO GRANTEE.

Permalink Reply by Jeff Payne on April 28, 2011 at 11:29am
It is only for 90 days, does the investor have someone ready to buy it now?  The clause does not say they can not resell it, just cant resell it for more than 20% more than what they paid for it.  Not sure how they would find out though
Permalink Reply by Smitty on April 28, 2011 at 11:51am
Karla, are they realistically going to make more than 20% profit?  On a purchase of $200,000 that's $40,000 and keep in mind that's NET profit.  So even if they resold at $325,000 you'd still be in the clear as you would likely be deducting let's say $60,000 in rehab costs, $5000 holding costs, $6% commission, $2500 lawyers and title fees.  Do the math... You're still under that 20% profit margin.
Permalink Reply by Jeff Payne on April 29, 2011 at 2:26am
Smitty, I agree!  The clause is really worthless in my opinion.  If Fannie is selling the property for such a price that it could be flipped by an investor with a 20% return, Fannie again has their head up their fannie
Permalink Reply by Vanessa Calhoun on April 29, 2011 at 2:29am
Someone should argue that agreeing to the clause constitutes price fixing, especially if they're in a market with other Fannie properties are listed and are direct competition.
Permalink Reply by Jeff Payne on April 29, 2011 at 2:42am
I dont think that there is any price fixing, it is only for 90 days and also quite a stretch to think that there is that much profit available within the first 90 days so the clause really means nothing.  Anyone know how Fannie Mae would even know if it was sold in the first 90 days?
Permalink Reply by Vanessa Calhoun on April 29, 2011 at 2:46am
Two of the attornies that I've spoken with about the clause seem to think that it is. Honestly, I don't think that they have the manpower to periodically scour through deed recordings and public records just to monitor what happens to one of their properties after they've sold it.

RSS

Members

© 2024   Created by Short Sale Superstars LLC.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************