Just looking for any input on others experiencing the Fannie & Freddie inflated value issues. Any recent updates or solutions? 

I have two files right now that that I am experiencing this with, one is a Fannie and one is a Freddie. It is clear they have inflated the value on their end. It's not a BPO issue, its definitely an over inflated counter. In one case they countered more than 50% of what the actual BPO came back at. 

I have had my challenges with short sales over the past few years but there was always a reasonable solution or resolution, it's amazing what you learn to accept as reasonable. There doesn't seem to be a reasonable solution with these groups.

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I'm tired of fighting them and spending hours on value disputes that aren't even looked at.  I think that our team is going to change our strategy with Fannie Mae backed loans.  Going forward, we'll start with a Fannie Mae suggested price and make price drops as needed until we get an offer.  That way if they give a ridiculous counter we can show them we tried their price and it didn't work.

It means longer marketing times, but hopefully it will shorten the negotiation period.

Fred, I've been doing this for months now and it is working out much better.  It's fun to put it in their faces that their asking price is so ridiculous that no one will even look at the property at that price.

I just had an interesting one.  The servicer said Fannie Mae needed $525K on a property.  We had an offer for $465K.  We got the buyers to go up to $495K.  Fannie Mae turned down the $495K and insisted on $525K.  Then the seller let me know that shewhen she tried to do a loan mod six months earlier Fannie valued the property at $399K. So I challenged the negotiator with this disparity in appraisals.  He claimed that the loan mod appraisal was just a drive by bpo and that the short sale appraisal was a full interior appraisal. So I asked why they would use one valuation method for loan mods and one for short sales.  No reply, but obviously the answer is so they can screw the borrower either way.  At any rate, magically, a few days later, we got our approval at $495K.

Donna, did you open a case with FNMA?

Yes I did.

Raymond,

Have you opened a case with Fannie Mae? You can open cases on their website as over several months ago and it might be able to help. With FHLMC you can potentially call in, but I believe they want to deal direct with the borrower. There are ways around their high values, but it is time consuming and nothing is guaranteed. I recently had a FNMA deal where the bank countered at 375,000 and there was NO comp to even support that value. The greatest comparable property sold for 300k. After going through the chain of command and executing some strategies we were able to get them down.

However, I did notice that your post is a bit dated. What ended up happening on those transactions? Were you able to find a resolution? Also, I believe that back in February, March, April and May they were potentially doing that on a high level in order to push real estate values up. Demand for property in certain areas had sky rocketed so high that properties could not appraise for what they were worth due to the crash. I think they figures that if they held on they would eventually get that price or foreclose and get that price as an REO... but at the end of the day who knows...

Either way I hope that your transactions worked out!

Cheers!

See the attached.  No surprise there!

Attachments:
Put an offer on a SS in april. Three weeks ago, Fannie Mae came back at 286K, which is 41K over the initial asking price and 61K over our contracted offer. Seller’s got an appraisal, which came in at 240K. Agent disputed the value through homepath and now the bank has ordered another BPO…any insight?

This is the easiest and best time to get the price right. Many agents give the bpo agent no clue, the banks often push the bpo agent to jack the number and then the listing agent is surprised at a high price.

I would meet the BPO agent at the property, hand him good comps, possibly with explanations on them about why one is higher than your property (finished basement worth $Xk, etc) and let him know that you have an accredited appraisal at $240K. I would make it clear that I am no slouch and will be showing great interest in this BPO since the bank screwed up the last one - Basically get that message across, not necessarily saying it.

This is an opportunity to make a BPO agent think about doing the right thing and that there may be consequences to waffling to bad comps/numbers given to him from the bank - you have his number, so to speak. And, getting your deal done..

Thanks for the feedback, joe
Listing agent met the broker at the property with comps. Now we are waiting for Fannie Mae to reply...who knows how long

Fannie Mae Short Sale Approved.  Almost a year of battling over value is over!

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