It seems as though Fannie Mae has been raising prices on approved short sales, by as much as 25% in some cases, causing deals to fall through and forcing many of these homeowners into foreclosure
Orlando, FL (PRWEB) November 12, 2012
Back in August, Fannie Mae announced that they had accepted new federal guidelines to “streamline short sale processes to prevent foreclosures and help communities stabilize.”
However, only two months later there are reports from other agents, as well as mainstream outlets, that show a more obstructionist path being taken by the government-sponsored enterprise.
Fannie Mae has been raising prices on approved short sales, by as much as 25% in some cases, causing deals to fall through and forcing many of these homeowners into foreclosure. Real Estate agents, including RE/MAX Exclusive Collection CEO Michael Kara, are reporting situations in which deals are falling through after months of negotiation due to appraisal overvaluations.
“We had a last minute rejection by Fannie Mae just two weeks ago, as they decided they wanted a 12% increase on the price to the tune of an additional $58,000,” said Kara. “It quite definitively killed any hopes for our seller of avoiding foreclosure.”
Where things become increasingly murky is that these foreclosed homes suddenly become available for purchase via Fannie Mae’s Homepath program. It’s important to note that Fannie Mae Homepath loans do not require an appraisal. The entire reason appraisals exist is to act as a checks-and-balances system so that the buyer of a property is assured they are paying a fair price and the mortgage backer ensures the value of the property. It is certainly the reason that Fannie Mae requires appraisals on their short sale approvals. But, with Fannie Mae skipping the appraisal step on their Homepath loans, buyers won’t realize they are overpaying, and their mortgage lender isn’t going to steer them in the right direction because their mortgage lender is also the seller: Fannie Mae.
In their August press release, Fannie Mae’s Senior Vice President Leslie Peeler stated, “Short sales have become an increasingly important tool in preventing foreclosure and stabilizing communities. We want to help as many homeowners avoid foreclosure as possible.”
Increasingly, we’re seeing more instances of these sorts of happenings from across the nation. Chiefly, it is real estate agents pointing out these discretions, quite possibly because they are the only ones who don’t have anything to fear from Fannie Mae’s backlash.
“By unfairly inflating prices to force foreclosures, Fannie Mae is destroying the financial lives of many to bump up their bottom line a few points of a percentage. Short sales can be the easiest path available to those in a very difficult situation, and we need to make sure that it remains a viable one,” said Kara. “We encourage Florida agents to contact Senator Bill Nelson via email form at his website or to call his office directly at (202) 224-5274 to address their concerns.”
Michael Kara has been consistently ranked in the top one percent of real estate agents in Orlando for the last six years. He is the president, as well as chief broker, at Kara Homes & Associates LLC and an expert in the Orlando short sale process.
Kara recently expanded his operations in Orlando last month by opening the brand new RE/MAX Exclusive Collection. Utilizing the RE/MAX association, as well as leveraging Kara’s extensive real estate experience, RE/MAX Exclusive Collection specializes in the luxury real estate market throughout Central Florida.