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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.
REDC Threatens B of A Seller on Turkey Day
An unnamed person at Bank of America confirmed for me last week that the bank is indeed pulling its HAFA and Cooperative Short Sales in-house — which is music to any short sale agent’s ears. And not the crappy kind of music like Barry Manilow, but more like early Beatles, before Yoko Ono messed everything up. And not just to this Sacramento short sale agent, but every short sale across the nation is putting down her pumpkin-pie laden fork and giving thanks to the decision by B of A to do away with its third-party vendors like REDC for these short sales. With any kind of short sale, though, these miraculous changes don’t happen over night. As a result, we are stuck with REDC for a handful of Cooperative Short Sales still on the road to Pocatello.
I have asked negotiator, let’s call her Mao, through Equator over and over and over to clarify for us whether she is negotiating a Carmichael short sale as a Cooperative Short Sale because everything about this particular short sale has gone sideways. It’s not being handled at all like a regular Cooperative Short Sale. This negotiator has ignored all questions. Then, on the day before Thanksgiving, she gave us 24 hours to send her financials or she would close the file.
24 hours on Thanksgiving Day!
Yes, on Thanksgiving Day, instead of celebrating with his family, a seller scrambled to pull together financial documents he was promised he did not need to submit. I suspect part of this request is due to the fact that Fannie Mae changed its guidelines on November 1. But even so, it is inexcusable that a representative for Bank of America would purposely cause a borrower, a client of Bank of America, such grief on Thanksgiving. This negotiator has continued to ignore requests, too.
I will say, Mao, do you realize this is a preapproved Cooperative Short Sale? And she will say: Remove the incentive from the HUD. Again: Mao, are we on the same page that this is a preapproved Cooperative Short Sale? Instead, she will ask how much the seller is willing to contribute. She outta lay off the eggnog.
It’s a good thing that Bank of America is getting rid of REDC. It’s just a shame it’s taking them so long to pull the plug.
