Steps For Disputing An Inflated Fannie Mae Value On A Short Sale

How To Dispute A Fannie Mae Value On A Short Sale

Hi folks. If you work Short Sales you know that one of the issues we have right now is Fannie Mae coming back with values that can not be supported by the market.

Inflated property values are the norm with FNNMA. They counter EVERY transaction with a very high price. You can count on it. If you are not prepared for this you can easily have your Fannie Mae HomePath Short Sale blown out of the water.

Since we know Fannie Mae is going to counter on price it is imperative that we can prove to FNNMA that the Short Sale Offer we have is "highest and best" and IS the market value for the short sale property.

So what do we do if we are listing a Fannie Mae HomePath Short Sale?

First, go to the Fannie Mae Loan Lookup Tool to verify that Fannie Mae is the investor for the loan you are getting ready to Short Sale. You will need a signed authorization to do this. Or the borrower can do it for you.

If the investor is Fannie Mae then go ahead and have your seller complete a Fannie Mae Borrower Authorization Form. You will need this later.

Now you have two choices.

  1. Ask Fannie Mae to give you pricing before you list the property.
  2. Wait and find a buyer and submit the short sale knowing FNNMA will counter the deal.

I prefer the 2nd choice. Why? Because I really need showing history and listing history to help support my value. I'm not concerned with Fannie Mae giving me a listing price as that is what I do for a living. I am concerned that I may need to justify my contract price.

To do that I need data. Lots if it!!

You can dispute a Fannie Mae Value at Fannie Mae's HomePath Short Sale Site.

I've done this about a dozen time and was able to close on all of them at our contract price.

I use data from:

  1. MLS
  2. RPR (Realtor property resource) use a full report with stats for the area.
  3. Zillow. Why not? FNNMA does.
  4. Tax records
  5. Private sales
  6. List history (FNNMA requires the property to be active on the market at least 7 days with 2 of them being over the weekend)
  7. Showing history with agent feedback

Overwhelm them with data that supports your pricing. My experience is that as long as you can prove your case they will eventually agree. I've done this numerous times and all were successful. My average dispute is roughly 25 pages long including a cover letter explaining what we did to price, market and sell the property. 

You can also dispute value at time of listing through  Fannie Mae's HomePath Short Sale Site. And be sure enter you offer details in Homepath as soon as you send the Short Sale Submission to the servicer. That way FNNMA will monitor the transaction and keep it moving forward.

So don't let a high value from Fannie Mae derail your deal. Expect it and start preparing for the Fannie Mae Value Dispute at time of listing. I hope this helps.

Fannie Mae HomePath Short Sale Quick Links

  1. Fannie Mae Loan Lookup Tool
  2. Fannie Mae Borrower
    Authorization Form
  3. Short Sale Affidavit
  4. FAQs
  5. Contacting Fannie Mae about
    an Active Short Sale Fact Sheet
  6. Listing Agent Checklist
  7. Report potential fraud on a
    Fannie Mae short sale

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Comment by John Slocum on December 16, 2013 at 11:06am

Great info Bryant!  I had a recent experience with the added twist that the first buyer passed on the property when they did not like the Inspection Report and they were willing to share the complete report with us.  Thus, I was able to throw in Contractor Repair bids based upon the Inspection report (Failed Roof and Siding were the Big issues).

Thanks!

Comment by Kevin - Greenville, SC on October 17, 2013 at 1:55pm

Great stuff Bryant!

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