I'm sure many of you are anxiously waiting for information regarding the results of the conference call set up to discuss issues with Fannie Mae evaluations on Fannie Mae short sales. I will attempt to summarize said call, but first, I want to point out once again the value that NAR provides for our industry. Without their continued commitment to fight for our causes, this would not have taken place.

Probably the best way to summarize the call is that is was an open, direct and passionate discussion. Some of the highlight points were:

1. Clarified the Fannie valuation issue is now the rule -not the exception re: Fannie Mae short Sales

2. This appears to be a Fannie Mae problem - not the servicers

3. This is not an isolated geographic problem, but generally throughout the country

4. There appears to be some signs that we are seeing the same trend maybe beginning with Freddie

I believe the main objective was to provide sufficient date to show this issue is real and needs quick attention. I feel this objective was met. I believe NAR and FHFA are truly committed to work with FHA to find solution(s). Recently, Fannie Mae working with NAR initiated the Homepath Short Sale web site and one of the proposed segments of this site is to be able to escalate valuation issues. Many of you may already know about this site, but those who don't, please use the link below and check it out.


It was agreed there would be continued communication. I would suggest that you work closely with your local and/or state Realtor Associations and provide good, concise examples of Fannie Mae short sales that you can "factually" show examples where Fannie is using values that are clearly in excess of FMV. I will attempt to keep you posted on updates if and when I received them. Thanks again for all your support and response

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Thanks for sharing this Ken. not much I didn't already know but good to see they are working on it.

Thanks Ken! Like Brian says, it is good to know they are working on it. Freddie Mac is also doing the same thing.

Thank you for the update, Ken. 

I agree that it is a Fannie Mae problem and not the servicers. Each lender/servicer I have dealt with regarding a valuation issue has stated that it is a known problem and one they are working to resolve. On a positive note, I have won all of my  valuation disputes since 11/1 (the date the changes went into effect, I believe) simply by supporting my offer price with recent sales and market data. 

-Andrew Coppo

Greater Boston Short Sales, LLC

Do you guys think that this FNM valuation problem is related to they crazy asking prices on their Homepath homes?

I've been on a market to purchase a home for a year now and every FNM homes listed have been grossly overpriced and sitting for months (getting email updates every few weeks with all the homes listed getting a "price reduction" but still not going under contract.)

On the other hands, other REO's (like WellsFargo) have been selling like hot cakes because they were very well priced.


I want to personally thank you for taking this issue to task.  I know that many of us agents here in Arizona are extremely concerned about the very high valuations that are coming in... The majority of the Phoenix Metro area has experienced some healthy appreciation over the last year, but when the valuations tack on another 10-50% to accelerate market prices, it just doesn't seem right. In fact, to some degree, isn't this what got us into trouble in the first place?  The high valuations hinder the short sale process and encourage increased numbers of abandoned, foreclosed properties.  I believe this the antithesis of what society as a whole is trying to prevent... Thanks again, Ken.

Liz Harris, MBA

Designated Broker

Hi Liz

Thank you for taking time to respond. I hope that we can get Fannie to take the steps needed to resolve this issue.

If you have time, would you please call me direct. Since you are in Arizona, I would like to coordinate with you on examples specificially to our region.

My direct line is 520-407-8601

Hi Liz

Sorry, but Keith's profile was used for my response. Call me if you can.

Ken Ryan


Thank you for the work that you are doing on behalf of our industry.  I personally have been benefitted by your knowledge and experience and I know others have too.  I hope to have a positive update for you soon on that one we talked about where Fannie Mae was requiring that the 2nd lien holder forgive the debt.  I'll let you know when it is resolved.


Hi Ken:
I have a very specific example of a Fannie Mae owned short sale services by IndyMac/OneWest that has a serious valuation problem.  Please let me know if you are interested in the details.

Jim McCormack

Here is my situation. A short sale was approved by both lien holders (1st is OneWest/IndyMac/Fannie Mae and the 2nd is EMC/Chase) back in 11/2011 for $180,000 (I have the approval letters), but when the title was pulled in December prior to closing it was found that the seller was hit with over $42K in IRS liens in November 2011.  The short sale was dead due to that as OneWest would not extend the short sale approval and would not postpone the foreclosure sale scheduled for 12/16/2011 to allow us enough time to get rid of the IRS liens.  As a result of the pending foreclosure sale the seller filed bankruptcy (again).  From 12/2011 to around August 2012 the file was worked through bankruptcy court.  I got involved again in August 2012.  The 1st lien holder did a new valuation in September 2012.  That BPO agent turned in $174,000 (or very close) because he told me when I asked him.  Unfortunately, the 1st lien holder's (OneWest/IndyMac/Fannie Mae) counter to the same $180,000 offer that was approved in 11/2011 was now $315,000 despite this $174,000 valuation.  ServiceLink is the 3rd party company processing the short sale for OneWest/IndyMac.  They claim that the $315,000 valuation is coming straight from Fannie Mae and there is nothing they can do.  After a valuation dispute involving an appraisal ordered by the buyer which came in at $220,000, ServiceLink said that Fannie Mae lowered their value to $269,000, which is still way above market.  This whole situation is absurd.  How could the property be worth $180,000 in 11/2011 and then worth $315,000 (and later $269,000) in 11/2012 when the market has not improved and the property still needs a lot of work and has not improved at all.  My guess is that Fannie Mae order a drive by BPO, or used an automated valuation system to come up with the higher figures instead of the full interior BPO that came in at $174,000 due to the poor condition of the property.  If you want the address of the property or other information please let me know.  I have records of evverything.

I just met with a ciient yesterday that has an IRS lien.  We are going to do a short salr -- how did you handle the lien?  I have never experienced a short sale where an IRS lien was involved?


Hi RoJane

We have done several and believe it or not IRS is wonderful to work with

What you need is a Certificate Of Discharge

1st go here for instructions


Then go here for a form to fill out


You need to have an approved short sale and a approval letter, you can expect they will want an appraisal and like a short sale you will need to send them a package to show that the sellers cannot afford this home and pay the lien

Takes about 30 days to review and release the lien

Again we have completed several so feel free to contact me with any questions

888-284-6447 [email protected]

Good luck




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