Several months ago, agents across the United States were thrilled to learn that all Fannie Mae short sales would be approved with a 6% commission! Phew! What a relief. Agents working short sales were getting so tired or having their commissions cut to five, and sometimes even four percent on short sale transactions.
Most short sale agents would probably agree that a short sale is so much MORE work than a traditional transaction-and then to have your pay cut by 18%. Ouch! Most of us had already received reductions in wages when property values declined in our areas, thus plummeting our income beyond control. So, to hear that we would receive 6% (to split 50/50 between listing and selling agents) was like a breath of fresh air.
And then . . . here comes Fannie Mae again-trying to beat us down. There's news flying around that Fannie Mae has implemented a new policy effective December 15, 2009 that they will no longer postpone trustee sale (foreclosure) dates. Fannie Mae is requiring that the short sales are closed before the sale date. If the transaction cannot close the short sale before the sale date, the property will go to sale and foreclosure will occur.*
Okay . . . so let me get this straight. I submit my adorable little short sale package to my lender three months prior to the estimated foreclosure date. They lose it several times and never upload it into the system. After about four weeks, the package is finally assigned to a negotiator who then works on it for eight more weeks and then generates an approval letter. I have lost three months waiting for the short sale to be approved, and the approval date on the approval letter is 40 days away. Only one problem . . . bank has already scheduled sale date for next week.
If this is actually true, what is wrong with this picture? Is this actually fair play?
One of our Active Rain colleagues actually informed us that Mercury News reported recently that this incredulous decision may be due, in part, to the fact that "the government is removing the $400 billion cap given to Fannie Mae and Freddie Mac. It will be replaced with a flexible formula, a "sufficient cushion" to cover expected losses over the next 3 years." (Read: We will not be in a financial position where the cost of a short sale vs. a foreclosure will mean anything to us.)
Again, I say "What is wrong with this picture?"
*Note that I have spent a good amount of time researching this subject. I have two or three credible sources that discuss this decision, yet I have not yet been able to corroborate these findings on the Fannie Mae website.
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