Replies to This Discussion

Permalink Reply by Steven Angelil on January 20, 2013 at 5:00am

I've always wondered about "relocation" expenses.  It never made any sense to me that the seller is offered "relocation" expenses, but they have to vacate the property PRIOR to receiving such funds.  So if the seller really needed the funds to move I guess they are going to have to live in a hotel or car until after closing.  Has this occurred to anyone else??

Permalink Reply by Marti Sauers on January 20, 2013 at 6:57am

So let's think about this ...  Both Fannie and Freddie home lookup sites require the seller's last four of the social.  So, that means the buyer can't get this now critical information. This leaves the entire (entire) liability on the Seller and Listing Agent, and I'm sure you will all agree this is a material matter.  Anyone see the problem?  I represent both buyers and sellers in short sales, and I see HUGE problems.

1.  In the Phoenix market, this effort is about 2 years late.  Not surprised at all by that.  But it will only hurt us now ...

2.  As a short sale listing agent, I have the duty and obligation now more than ever to confirm who backs the lien.  Not that I don't anyway, but does everyone??  We SS Superstars are a small percentage of Realtors taking short sales.  What about those who don't even know about these new rules -- and there are a lot of them!

3.  As a buyer rep -- this is just another way to strip buyer rights in a short sale.  And it's RIDICULOUS!!!  Buyers here are already subject to non-refundable earnest, inspections at time of contract (not bank approval, which could be 6 months later), as is addendums, waiver of SPDS, etc.  

In my opinion ... this is not good for our market, it puts unreasonable liability on Sellers and Listing Agents, and it's not good for buyers because they cannot confirm who backs the lien until well into the process unless disclosed upfront.  But did Fannie/Freddie think about that?  Of course not!

And then, what if Fannie/Freddie is disclosed 30 days in and my buyer has 90 day non-refundable earnest?  I personally know some agents that will withhold this information until the buyer is locked.  

This is a big problem guys, and one not well thought out at all ...

Permalink Reply by Monica Hill on January 21, 2013 at 4:58am

I've seen this restriction in place for at least the last year. It's been in the documentation that all parties sign with the initial offer. It does have me wondering, in light of the comments here, if it should be disclosed in the public comments when you list a property. But.. will that hinder the sale? Savvy investors have been aware of the restrictions but what's the duty to the public in terms of disclosure? 

Permalink Reply by Sharon Burgos on January 21, 2013 at 6:11am

I've seen these kinds of restrictions for at least 2-3 years now.  So it doesn't seem like anything new to me, it's just been standardized in a way.  It also doesn't seem to make much difference to my buyers.  If my buyers are owner-occupants then they don't plan on selling the home within 90 days.  If my buyers are investors, they either want to hold and rent - no problem there, or, they want to rehab and sell.  No problem there, either, as the rehab normally takes 30-60 days and if they have to wait a few weeks to list in MLS, so what?  In all likelihood the buyer after rehab will need financing which will take at least 30-45 days before the actual sale takes place.  To me it just seems like much ado about nothing. 

Permalink Reply by joe beauchamp on January 21, 2013 at 6:18am

Up to this point, the arms-length, etc. type addenda only use terms of intent, like the buyer does not have an agreement to sell the property back to the seller. I think that there is more than 1 reason for this. 1) bringing out a witness or document which shows that the buyer lied when he signed the affidavit is clear fraud; 2) I believe they have a real constitutional problem dictating how someone else's property is disposed once you have no legal standing or control over that property. So, I will be interested to see if the new forms will say that the buyer does not intend to sell the property for more than 120% of purchase... or if they try, with no legal wording in the deed, to dictate how the buyer actually does dispose of the property. I think they have probably been beaten up in the past for overreaching.

Permalink Reply by Kevin - Greenville, SC on January 22, 2013 at 12:02pm

NOTE: If the servicer believes that the resale restriction is not appropriate for a particular short sale, then 

the servicer must submit the mortgage loan with an explanation to Fannie Mae for written approval prior to 

instructing the settlement agent to insert the above-referenced deed provision

 

https://www.fanniemae.com/content/announcement/svc1219.pdf

 

Is there an exception process to the resale restriction?

If the circumstances of the transaction require a resale restriction be omitted from the deed, then you must send the request to Freddie Mac at [email protected]for approval before instructing the closing attorney to exclude the restriction from the deed. You must include an explanation of the borrower’s request to have the resale restriction omitted.

 

http://www.freddiemac.com/singlefamily/service/short_sales_FAQ.html#7

Permalink Reply by ElizabethWeintraub00697006LyonRE on January 23, 2013 at 3:15pm

I saw that notice and have received a few approvals with that restriction verbiage in the short sale approval letter. I made sure to get the buyers' signatures as acknowledgment on those approval letters and fortunately none of the buyers was concerned about selling any time soon. In the first instance, I thought maybe it happened because the home was sold way under market value -- yes, under market, go figure. But in the second, no. 

With Fannie Mae it seems to be hit or miss. They can be at market, under market or way, way above market. I went directly to Fannie Mae to contest a valuation on a Bank of America approved Cooperative Short Sale because Bank of America's third-party vendor refused to submit. They were asked to escalate for review on Christmas Eve. On the day after Christmas they emailed to say the value stood as determined. That was not enough time to open a bag of toilet paper and wipe their butts. I've also had Fannie Mae pay borrowers who were not living in the home. The occupancy requirement is for HAFA incentive, and no longer applies to Fannie Mae.

• ‹ Previous
• 1
• 2
• Next ›
• Page