Fannie Mae Oversees A Third Of U.S. Home Loans- and getting creative on selling 65,000 of the ones they now own!
Fannie Mae owns or guarantees about a third of the nation's home loans —18.3 million loans valued at $2.7 trillion — according to recent data from the Federal Housing Finance Agency. Due to the increased number of investment foreclosures and the fact that 60% of homeowners walked from their home instead of trying to work out a modification Fannie Mae is found in a situation trying to get creative to move 65,000 homes with as much finesse as one could imagine- call it the world series of managing a crisis.
Homepath to the rescue- For those that learn about the benefits of Homepath will benefit the most as well as the neighborhoods due to the stabilization of value.
"Our No. 1 strategy is to sell them one-by-one," says Gabrielle Harrison, Fannie Mae's vice president of foreclosure sales.
But that strategy is both time and cost intensive. Many of the homes are left in disrepair, or have been vandalized as former owners move out.
Selling Foreclosed Houses
On average, Harrison says, the company spends about $10,000 per property to fix it up for sale. Then Fannie Mae has to assess the price and manage the sale. In all, Harrison says, it's taking the company an average of 90 days to sell a home — even in some of the nation's most distressed areas like California, Nevada and Florida.
"Our main philosophy is to preserve communities and maintain property values," Harrison says. Doing so, she says, means identifying the exact right price for each home.
Arriving at that price, however, can feel like pinning down a moving target.
The real challenge for Fannie Mae, which since last year has operated under government conservatorship, is that it has two mandates that sometimes conflict. On the one hand, it wants a quick sale so it can reduce its exposure to the housing market. On the other hand, it doesn't want to price homes so low that it ends up undercutting the prices of other homes.
With the creative Homepath loan Fannie Mae basically is treating this purchase almost like a streamline refinance with some INCREDIBLE- almost unbelievable benefits.
Borrowers save money and time by WAVING THE APPRAISAL PROCESS that's right- No more appraisal issues that are killing these deals. We are seeing so many “worst case” scenario underwriting options that they use AVM which is Automated Value which overrides the professional and drops value to an almost insulting price. Purchase Price is what is accepted with up to 6% seller closing cost on owner occupied and 2% on Non-Owner.
NO MORTGAGE INSURANCE REQUIRED UP TO 97%- That’s right we are beating FHA that has a 3.5% down requirement and a .55% MI for 5 years! We are also saving the transaction by not having to rely on unstable mortgage insurance companies that are re-underwriting transactions and killing the deals for no apparent policy reasons besides the fact that they “don’t like the area”.
90% Non-Owner Occupied Purchases which are unheard of in this market. Majority of lenders are at 75%- no other options. Now we can do 10% down with NO MI! Hint-Hint: Mr. Investor- It’s time to roll!
6% seller contributions on Owner Occupied and 2% on Non-owner occupied
Not very well known as it has limited lenders and not offered via the “big banks” such as Wells Fargo, Metlife, Bank Of America, US Bank etc. They do not seem to see the value in these loans or I guess we can say the “PROFIT”. Sometimes what is good for the buyers is not exactly the most profitable for the banks.
Rates are in the same low Fannie Mae Rates offered from all lenders.
Leveraging Technology
Pat Mahoney manages Fannie Mae's valuation team, which uses software that integrates several real estate databases and Google Maps to evaluate various markets around the country. Even with all that data, it's hard to gauge a market that's still falling quickly in so many places, he says. In the Northwest they are working with very knowledgeable Realtors that are marketing the houses accurately and completing the work that is needed to spruce up the home for the buyers. A recent offer was listed at $229,000- dropped down to $224,900 after a sale fail and a few days later another offer was accepted at $216,000 from Fannie Mae.
Multiple offers are starting to come in as more Realtors are learning how to offer these benefits, rates are at all time record lows, and the bottom is starting to show its face.
Meet The New Landlord
In January, Fannie Mae started a new rental program, allowing tenants living in foreclosed properties to continue to live there with the company as their new landlord. The company has some 1,800 tenants living in foreclosed properties, and to date it has secured 20 signed leases.
"Having a tenant is good for neighborhood stabilization," because tenants take care of their homes and participate in the community, says John Bauer, director of the company's rental operations. Homes that are occupied also tend to fetch better prices when sold, especially if the buyer is an investor, he adds.
But all the properties, whether or not they have tenants, must be sold. And most of Fannie Mae's sales have to be handled remotely — far from the company's Dallas sales operations — by relying on local real estate agents who help handle the sale. Shannon Wheeler and the Sundin Realty group has a handle on it in the Pacific Northwest currently as they have been listing homes as fast as they can enter them on the www.homepath.com site.
We at America One Finance- Downtown has been utilized as the preferred lender for these specific loans and are having great success competing with the popular FHA loans and yanking the investment shoppers off the fence with the unheard of 90% option.
The Homepath program is only offered on specific Fannie Mae homes that have been selected from Fannie Mae as Homepath qualified homes. To be pre-approved for a homepath loan or for more information feel free to email me at bill@aofdowntown.com
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