In case you hadn't heard the good news . . . here it is: No More Commission Reductions for Fannie Mae Short Sales!
But, what does this mean? And . . . how could or would it impact the short sale in process right now?
As the largest sources of home financing in the United States, Fannie Mae (FNMA) and Freddie Mac (FRE) are privately owned by shareholders, yet they are congressionally authorized and regulated by HUD. You see, when your client's mortgage statement comes from Countrywide, for example, this does not necessarily mean that Countrywide holds the note on the property. In many cases, lenders named on mortgage statements are servicing companies that are charged with collecting the mortgage payments for the note holder or investor.
That's where Fannie Mae comes in. Fannie Mae is the investor, and uses multiple servicers to service the notes that they hold.
So, how does this impact short sales? Well . . . that's where it gets interesting and also challenging. When negotiating a short sale, it is best to know who the investor is on the note. This information can usually be provided to you by the servicer. If the servicer tells you that the investor is Fannie Mae, you can jump for joy. You know that beginning March 1, 2009, they will be paying you 6% commission on the short sale! (An exception applies if the total commission is more than six percent of the sales price.)
All in all, this is great news. Other investors will eventually have to follow suit, especially if they expect to be competitive in this economic climate!
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