Same Fannie Mae Short Sale Wrinkle But Different Approach
In short sale forums across the country, agents are lamenting the problems associated with Fannie Mae short sales and Freddie Mac on short sales, but I suspect that many short sale agents in Sacramento never even bother to look up Fannie Mae loans nor Freddie Mac loans prior to commencing the short sale — because some of them are way too focused on themselves and the fact they got a listing instead of putting the focus where it belongs: on the client, on the transaction itself.
It’s true that Fannie Mae and Freddie Mac cause havoc in a short sale. What else is new? But at least they are trying to do something about their muddled mess, even if it’s fairly ineffective, they get a B-plus for effort. One of the newer components of these types of short sales is our ability as a Sacramento short sale agent to request a pre-approved sales price.
The sales price, I should note, is the list price, which is not necessarily the BPO value. Of course, that’s been the problem all along, the BPO has very little to do with the price that Fannie Mae and Freddie Mac demand. This is like trying to pat your head with one hand while rubbing a circle on your stomach with the other. Then there’s the question of whether the offer price needs to meet the list price because we still don’t really know how much Fannie Mae or Freddie Mac will accept.
So, far, list prices are still above market value.
This is different than when Fannie Mae or Freddie Mac, after 8 or more weeks of processing the short sale, notifies us of its demand for a higher price. This is often a strategy that means: the government wants to send the home to foreclosure, but we don’t want to come right out in the open and admit it. This is the strategy that has agents across the county up in arms and frustrated with our government sponsored enterprises (GSE). I don’t really know why the GSE’s adopt this strategy, but in my world, I’d rather get this information on the front end than the back end, and so would my sellers.
That brings to question the status in MLS after an offer has been received. Because even in its new practice, Fannie Mae and Freddie Mac cannot seem to get us the pre-approved value prior to an offer. If we change the status in MLS to Pending Short Lender Approval, it means we don’t want any more offers. If the offer we have received is not close to or above the pre-approved price, we could be hosed if the buyer won’t raise the price upon demand, and we won’t get that demand from the GSE until we are closer to closing.
My solution for these dilemmas is to leave the file in Active Short Contingent status and allow backup offers.