Members - I need you help quickly!! I have been in contact the past few months with NAR and Treasury Dept. regarding this issue. Please see the text below from my contact at NAR. If anyone is willing to provide "specific" examples per the request below, please do so ASAP. My contact information is as follows:

 

[email protected]

Thank you 

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 *****You can send info directly to Ken at [email protected]

Ken -

 

I’ve arranged a conference call with the Federal Housing Finance Agency (Fannie’s regulator) for Tuesday, January 8th at 1pm EST to discuss Fannie Mae short sale valuation issues.   Fannie Mae reached out to several state associations in acknowledgement of the issue and efforts to improve communication on the process.   NAR contributed input on the development of Fannie Mae’s HomePath short sale site that includes an escalations contact form to resolve some of these issues.  Though this is a good step towards a positive resolution, we’re still moving forward with other advocacy efforts.

 

In preparation for this meeting, I’m wondering if you could help me track down specific examples (with property addresses) that you could provide us ahead of time?  If we could get specific examples to share, it will help FHFA staff do some digging and identify any problems in the process or models.

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THIS POST IS PUBLIC SO DON'T POST CONFIDENTIAL TRANSACTION DETAILS HERE. 

 *****You can send info directly to Ken at [email protected]

you are correct I have removed my post and emailed him directly.  Thanks!!!!

YES. I have a huge issue with Fannie Mae.

We had an approved price on a property (Fort Lauderdale, FL) of $280,000 as per BPO.

THis price was in line, and even a tad high for the condition of the home.

We received an offer for $270,000, which prompted a new BPO order as old BPO was nearing 90 days.

New BPO must have come in much higher as Fannie Mae countered with $325,000  (impossible price point for this home)

Buyer countered at the previously approved $280,000, which was rejected.

Buyer requires a loan so had  appraisal done.

Appraisal came in at $274,000

Submitted a value dispute and included the new appraisal along with Inspection report showing $$$ thousands of repairs required. and a good indicator of the condition.

Fannie Mae rejected/ignored  the appraisal and inspection report.

Recently Submitted new comps in support, proving that the value could not possibly exceed $280,000 with a new Value dispute

Fannie Mae's review timeframe of 7-10 days for a value dispute is now going on 17-20 days for each review

Rediculous.

To date,They have chosen to take the BPO report  of an in experienced realtor from another county paid $40 instead of a licensed appraiser of 25 years who is an expert in the local subject area and a home inspection with photos outlining defects and repairs needed

xxxx Reno,NV

Cmps showed 75.000 was a strong list price listed property and got a offer at 60.000

summited short sale offer  ,they came back and said we should have listed it at 150.000

and approve the sale at 135,000 ,  buyer does apprasial and it come back at 60,000

they refuse to even look at the apprasial, so declince the sale at that poinr rhe buyer is trying to save a US Wolf refuge

so he has come back at there price still waiting for a new approval . 

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 *****You can send info directly to Ken at [email protected]

Through CitiMortgage - Investor Freddie Mac

 

xxxx Beaver Head Ct

Columbus, OH  43230

Listed at $139,900

Contract Price:  $125,000

Freddie Mac Counter:  $145,000 - $155,000

1800 square feet with 3 bedrooms, 2.5 baths

 

In the same subdivision, I have 2 other properties with approved short sales that are not Freddie Mac or Fannie Mae.

Wagon Wheel listed at $148,000

Contract price: $140,000

2200 square feet with 4 bedrooms, 2.5 baths

 

Roxham Ct listed at $150,000

Contract price: $138,000

2000 square feet with 4 bedrooms, 2.5 baths

 

All 3 properties are in the same condition, all need updating, new carpeting and paint.

THIS POST IS PUBLIC SO DON'T POST CONFIDENTIAL TRANSACTION DETAILS HERE. 

 *****You can send info directly to Ken at [email protected]

I have a listing at xxxx Overlook Drive in Clinton NJ. Garden State. It was initial listed at $134,900 with price drops of $10,000 approximately every 30 days. After 4 price drops it is currently listed at $104,900. We have had two offers, $85,000 and $90,000. The BPO came in at $124,000 which is higher than the tax assessment. Both offers were rejected and a deed in lieu was requested.

I sent them repair estimate and CMA showing the market value is approximately $85,000 to $90,000. Also, since it has been sitting at $104,900 for over 90 days that another price reduction is needed to $94,900.

New Jersey is a judicial state where foreclosures cost lenders $50,000 to $80,000 for legal fees and takes 3 years to process due to the back log of cases.

It this point the lender should have taken my suggestion to drop the price to $94,900 and take the highest and best offer. I believe this is a good example for your case. If you need to contact me my cell is 201-819-6475.

This is a FannieMae property.

Good luck with your meeting.

THIS POST IS PUBLIC SO DON'T POST CONFIDENTIAL TRANSACTION DETAILS HERE. 

 *****You can send info directly to Ken at [email protected]

Ken,

I have two - one FNMA Greentree and one FNMA Nationstar.  I talked to the BPO agent on one of them and he stated that if he didn't come in where FNMA needed it to come in at, they would continue to throw it back at him until he came up with the figure they wanted.  Then, FNMA tacked on an additional $22K on top of the BPO value that the agent submitted.  The BPO agents are instructed that they are NOT to include any REO or short sale properties in their valuation.  Furthermore, condition of the property is not being taken into account; everything is based on sq ft only.  So, the BPO agents are being forced to use comps of investor fix and flips which in no way shape or form compare to the distressed homeowner who has NOT had the funds to update or even do repairs in many cases.  I will email you the addresses privately.

Liz Harris

Liz,

I would like to know where you are getting your information regarding Fannie BPO's. I do numerous BPO's for many lenders, including Fannie BPOs. Some of the information you've posted contradict my findings in my experience in the valuation process.

1. NEVER have I once been asked to change the valuation price to where Fannie "needs" it to be. If the BPO agent was asked to revise his value, it stemmed from the BPO agent not basing his opinion of value off of the bracketed values of the sold and listed comps used in the report. It makes no sense for Fannie to dictate where value should come in at as it is value that they are looking for in the first place.

2. While it is true that Fannie does request that REO and/or short sales are not used for comps, in certain markets (such as mine in So Cal) it's unavoidable. Fannie's stipulation comes from more on not using listed comps that are REO/short sales, yet I have used both REO/short sale comps for both sold and listed comps in my reports and they have been fine with it. Fannie's main concern is having the subject property being under-valued per active short sale listings, as we all know there are many short sale listing agents (present company excluded I'm sure) out there who under-list their short sales in order to induce offers. In some markets it's unavoidable not to use active short sale comps; fortunately in most cases if I'm not able to find active standard or REO comps I can locate active short sale comps that are priced within FMV of sold comp values and comparable listings and use them in the report.

3. Whenever there are repair issues with a property, I ALWAYS deduct cost of the repairs. Final valuation asks for two values: a) As Is value and b) As Repaired value. There is a Deferred Maintenance and Repair section in the BPO report specifically to address any repair issues that, if the BPO agent is performing their due diligence, will complete as needed. As lenders will not do repairs on short sales; they will (should) base their assessment off of the As Is value and not the As Repaired value should there be any repair/condition issues. BPO valuations are based on square footage only when there are no repair issues; in such instances As Is and As Repaired value will be the same. Condition is ALWAYS taken into consideration when assessing value. Also, If a BPO agent is not comparing condition of comps used in their report, they are not performing their due dligence to the bank, the seller, the buyer, the listing agent nor the buying agent and should not be doing BPOs in the first place.

4. BPO agents ARE NOT "forced" to use comps for investor flips for Fannie BPOs; if a flip is a viable comp and falls within bracketed values then yes, it can be used. In most cases an upgraded flip will be deemed to be a superior comp in the report (unless the subject has been upgraded as well) - superiority is also based on square footage as well - but in no way, shape or form are we "forced" to use flips as comps. Sold and listed comps - whether standard, short sale, REO or flip - can be used for Fannie BPOs as long as values are bracketed and make sense in order to give a true understanding of value at the time the report is done.

I do not think the agent doing the BPO is inflating the valuation. I think Fannie and Freddie inflate the value above what the BPO comes in at. I have talked to agents who have done BPO's on my properties, and they tell me what their BPO value is (or at least a hint). Freddie nor Fannie will disclose the value. They simply tell the listing agent what they want.

I apologize to everyone for putting specific information on the public site. I did send the information privately first. I received an automated response that Ken only responds on certain days. Tuesday would be the first day and that is the day of the conference call.

 

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