Is there a White Knight out there?

  • My first house in the 80's was a fixer -upper, and now that the kids are in college and the latest house sold I found the perfect small place to fix up to my standards.I can pay cash.
  • Asking price is an inflated $150K for a 2 bed 1ba original 1949. I bid up to $135K only because I saw the potential for me. It's been six months and as predicted within my lawyers letters, the pipes froze and burst in January. Land value is $70K
  • My RE Agent is good, but not knowledgeable of short sales. She handed Chase pictures, the home inspector report, and all comps showing homes selling at less than $135K. Nothing.
  • Today we were told by Chase they will not accept less than 150K because Fannie Mae will buy it for that amount. Really? Our Government and it's people will buy this empty deteriorating home for an over-inflated price from a bailout accepting corporation who issued excess mortgages prior to the housing crash?
  • I need some input: I would like to purchase this home. It is in a suburban neighborhood near a middle school. It is ripe for kids from the other side of town to break in and vandalize. It is a blight on a neighborhood and I want to fix it.....Thanks

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Good on you Dan O’Shea

So you are a cash buyer for a new primary residence on a Chase as servicer and a Fannie Mae as investor short sale property?

Unfortunately showing all cash ability to close does not help your case. Investors think that if a buyer has 100% cash to close then they probably have 120% cash as well. They know that cash buyers are not inhibited by a new lenders appraisal report value.

Chase is normally excellent to work with on short sales however Fannie Mae is the final decision maker.

Fannie Mae will not be paying $150,000 for that property. They will be doing a trust deed transfer at the foreclosure sale for zero cash out of pocket then they will subsequently be listing it in their Homepath conduit, selling it for at least 20% above fair market value and allowing that ignorant buyer to avoid any appraisal to secure their new Fannie Mae loan.

There is a method to fight this battle but winning that fight is a whole other story though. If your buyers agent and even more important the listing agent is inexperienced then you probably have little to no chance of getting that property at a lower actual current market value price. If your agent is representing both sides then that is another issue hindering your ability to achieve success. 

Highly experienced short sale agents may not have better odds than 50/50 of closing this at a price you would agree too.

I know this is not what you want to hear Dan but you may be happier taking your hard-earned cash to another property and closing under legitimate circumstances. 

We need 100,000 Dan O'Sheas in this market GOOD LUCK BUDDY!

This is an issue that is currently of national discussion... I agree with everything that SE Davis has said below....

OK-Thanks for the great advice!

Chase told my RE agent / selling agent that she needs to get the owner of the house to sign over his two Chase loans so they can gain possession. At that point they can sell it to Fannie Mae (unless I come up with the 150K beforehand) The  homeowner has a chip on his shoulder and refuses to talk to anyone but the RE agent, and certainly not a Chase rep. This seems surreal since the home was under contract with Chase in April 2012 for $146K, before the pipes burst. THAT purchaser was arrested at the contract table for back child support. I know this sounds like a soap opera and I am looking in other directions, however my job requires me to live 10 miles from work.

Do you know what is the loan payoff plus interest and fees and if the bank will still accept payment? If it is close to your purchase price, you could payoff the loan for the homeowner in exchange for the title for the property. In this way you could bypass the whole ridiculous mess and cut Fannie Mae out of the equation.

Other than that, it sounds like you were cut out of the whole deal. Time to move on to the next property.

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