fannie mae valuations

Fannie Mae Short Sale Valuation Issues

If you have a Fannie Mae short sale in Sacramento — or just about anywhere else in the country — odds are pretty much two-to-one that you will have a problem with the Fannie Mae estimate of value. The BPO is probably fine. Don’t blame the BPO agent. It’s Fannie Mae, not the agent, setting values. Fannie Mae seems to ignore the BPO. It’s the amount that Fannie Mae may decide it wants to approve the short sale that is the problem. You may be aware of the changes to Fannie Mae implemented last November, which were touted as a streamlined approach but as usual seems to be more smoke and mirrors than anything else — a way to make it look like they are doing something proactive when it’s the opposite.

You may ask how do I know these things? After all, I am just a Sacramento short sale agent, plugging along closing short sale after short sale, and that’s one of the ways I know what’s going on. Because I see it with my very own two sparkling eyeballs nestled above my honkin’ nose, that’s how. And I talk to other short sale agents across the country. I read press releases, announcements and news stories. I’ve been working on Fannie Mae short sales for years. I’m one of the few agents in this country who have probably read from beginning to end every single Fannie Mae supplement issued, not only to the regular GSE short sale processes but also the HAFA short sales through Fannie Mae.

I know what you’re about to read may sound like a conspiracy. That alone might make it seem unreal or fabricated, but I assure you it is very real. I can also assure you that I am not one of those whack jobs who sports an aluminum foil hat and scribbles pages of dribble to newspaper reporters. I also have no idea why the valuation problems are happening except to draw to conclusion that Fannie Mae wants homes to go to foreclosure so they can try to pawn them off on unsuspecting first-time homebuyers at inflated prices through its HomePath financing program, which requires no appraisal and is almost always way above market value.

I apologize for the fact it has taken me 3 paragraphs to set up my point. My point is Fannie Mae is routinely rejecting short sales by demanding prices that are higher than the market will support. It doesn’t come right out and reject the short sale as that would be too easy. Fannie Mae inflates values. If a home is worth, let’s say $200,000, Fannie Mae will demand, let’s say $260,000. It’s happened to me. I called the BPO agent and asked her how much she estimated for the BPO. She told me $240,000. Yet, Bank of America said Fannie Mae wanted $260,000. We presented an offer of let’s say $240,000 all cash and Fannie Mae rejected it.

Next, the months trudged on. Five months later we try again, only now the offers are only $220,000. This particular home has no updates and it needs work. I requested a reevaluation at Bank of America the day before Christmas. The day after Christmas, the REDC representative told me the value had to stay at $260,000. She did not escalate this or ask for a new valuation or even request documents from me.

I went directly to Fannie Mae next and asked Fannie Mae itself to reevaluate. The new BPO was conducted and that BPO agent called me to say the value she estimated was, let’s say, $210,000.

At that point, Bank of America closed the file. I have opened the file again.

There is a petition started by our friends at Short Sale Superstars, which agents and the public can sign to protest Fannie Mae’s behavior. It needs 100,000 signatures by February 25th. We are short today 97,493 signatures. Will you please sign the White House petition to force Fannie Mae to behave responsibly and ethically and to stop Fannie Mae from rejecting short sales in favor of foreclosure?

Fannie Mae is a government-sponsored entity under the protection of the Federal Finance Housing Agency. It’s your tax dollars supporting the beast. Don’t be part of the problem; be part of the solution!

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