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Permalink Reply by Short Sale Superstars LLC on April 17, 2014 at 7:48am

Have you pushed back on this yet or opened up a case with Fannie Mae? Anytime a file starts over you never know what may pop up differently, but in this case it sounds like a legitimate cause to push back hard on the note. Fannie Mae must think the clients have money for some reason continue to push back and show them that's not the case.

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Permalink Reply by toni blount on April 17, 2014 at 7:51am

Thanks for your response Brett. No, I have not pushed back yet but will do so now. Thanks!

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Permalink Reply by London Cox on April 17, 2014 at 8:55am

I've had this happen several times with our dear friends at Fannie as well, so you certainly have my every sympathy.  

My first suggestion would be to offer a cash contribution at close to the investor ($3-5k will usually get their attention), in lieu of the promissory note.  No one wants to pay more, but this is usually the path of least resistance.  This will be above and beyond the offer price and current net to Fannie and can come from any party to the transaction (or combination thereof).  They will usually accept a small fraction of the total promissory note balance if it means cash in hand at close.

The other variable that could be in play here is Fannie's dreaded EMV (Estimated Market Value).  This is an internal figure that they come up with using a variety of factors, including;  BPO value, estimated future appreciation of that property, borrower's financials, loan status, etc.  It can skew their demand upwards by as much as 25% in my experience.  I've had this rear it's ugly head well into deals that had been previously approved under more favorable terms.  The only way I've found to combat it is wait for the BPO to expire and resubmit.  This will also trigger another arbitrary EMV number to be run.  

The other thing I would note is that Fannie and Freddie both seem far pickier than most investors when it comes to borrower delinquency on the loan.  If your client is current on their payments, there is a good chance that could be causing you these difficulties.  If they are current, and the cash contribution I'd mentioned doesn't work, your only recourse may be for the seller to miss at least 60 days worth of payments on the first mortgage, then resubmit your offer package to the servicer.

Finally, to reiterate what Brett said below, if you haven't contacted Fannie directly, it certainly couldn't hurt to do so: http://www.homepath.com/contact_us.html   

I have seen many, many instances where servicers are not always clearly or accurately communicating the message from the investor.  It's always good to get the information directly from the source.

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