I received a phone call from a short sale seller in Michigan yesterday. He found me through an Active Rain blog about Fannie Mae short sales, and how Fannie Mae is insisting that my Sacramento short sale sellers who are current on their payments go into default before Fannie Mae will approve a short sale. The caller said his short sale was denied by Fannie Mae because he was current. To qualify for the short sale, he was instructed to stop making his mortgage payments and go into foreclosure. The seller was devastated.
Don't blame him for being angry. This is a travesty. Fannie Mae is owned 79.9% by the government which, for all practical purposes, makes it a government agency.
On top of this, under Fannie Mae's new guidelines, if a Notice of Default has been filed against a home that is presently offered for sale as a short sale or is in active short contingent status, if that short sale doesn't close prior to the auction date, Fannie Mae will not postpone the auction to allow the short sale to close.
How is Fannie Mae helping to prevent foreclosures in America, I ask you?
In regulatory filings announced December 24, Fannie Mae Chief Executive Officer Michael Williams is eligible for $6 million of compensation for 2009. According to the NY Daily News, Fannie Mae and Freddie Mac have tapped $111.6 billion in aid from the government, and in addition to Williams' pay, another 10 executives at Fannie Mae and Freddie Mac may be eligible to be paid another $30.1 million in compensation for 2009.
Moreover, Mercury News resports 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. Carte blanche funds. From the government. From you and me, the taxpayers.
Where aren't the Howard Beales in Congress screaming? Why aren't taxpayers yelling I'm mad as hell and I'm not going to take it anymore?