A Sneaky Way for Fannie Mae to Reject Short Sales

Fannie Mae and Bank of America can be a difficult combination in a Sacramento short sale. Not insurmountable by any stretch but still difficult. Part of this stems from the guidelines overhaul last fall, I suspect, in addition to the fact that Fannie Mae has been releasing Bank of America from servicing. But much of the struggles short sale agents face with Fannie Mae short sales probably have a lot to do with the fact that Fannie Mae, under the direction of the FHFA, has been moving away from short sales all together. There is a lot of speculation in the short sale community as to why.

It’s kind of a joke that Fannie Mae has set up a place where short sale agents can escalate or contest a price valuation. It’s just a website and a process to make an agent feel like Fannie Mae is doing something positive when it’s not. Just a way to shut up an agent. It’s sort of a smoke screen, I imagine. Because I knew a value was wrong, and I asked Fannie Mae to review it. Not only did the BPO agent call me upon completion of the BPO, but she told me the value. Fannie Mae again insisted on a much higher value — even with the evidence of the true value put before its very eyes. The BPO means nothing. The review process is worthless.

It doesn’t matter what the value is to Fannie Mae, if it doesn’t want to do the short sale it will set a value too high. And the value will stay there until the moon turns blue or the market finally turns around. That’s Fannie Mae and our government for ya.

I’ve got another short sale in which Fannie Mae is insisting we produce corporate documents for a buyer who is not a corporation. It doesn’t seem to matter how many times we ask them to read our lips, the buyer is not a corporation, the buyer is a general partnership, Fannie Mae has continued to demand corporate documents such as Articles of Incorporation. When we finally passed that hurdle, the representative from REDC asked for POF in the partnership name. It seemed fastest for the buyer to deposit all of the funds, including the balance of the sales price and all of the closing costs, into escrow.

The buyer deposited all funds into escrow and we presented Fannie Mae with the receipt. Not good enough, says REDC. The buyer must now remove all of the money from escrow, put it back into the bank and produce a bank statement. I’m not kidding. I wish I could make up this crazy crap — but then I wouldn’t be a Sacramento short sale agent, I’d be some insane person in a mental hospital.

Will both of these Fannie Mae short sales close? Yes, most likely. And that’s why I’m a successful Sacramento short sale agent. I hang in there for the long haul and don’t give up.