Fannie Mae Pushes Short Sale Sellers into Default, Gets Bonus Pay and Bailout Relief

By
Real Estate Agent with RE/MAX Gold DRE #00697006

Fannie Mae short salesI 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?

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elizabeth weintraub

 

 

Weintraub and Wallace Realtors

 

 

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Elizabeth Weintraub is co-partner of Weintraub & Wallace Team of Top Producing Realtors, an author, home buying expert at The Balance, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown, Carmichael and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Call Elizabeth Weintraub at 916.233.6759. Put our combined 80 years of real estate experience to work for you. Broker-Associate at RE/MAX Gold. DRE License # 00697006.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of RE/MAX Gold. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

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  1. Rosemary Brooks 01/04/2010 09:21 AM
Topic:
Real Estate General Information
Location:
California Sacramento County
Groups:
California Short Sales, REO's, and Foreclosures
Posts to Localism
Short Sales Specialists
Lyon Realtors
Club Chaos
Tags:
foreclosures
elizabeth weintraub
short sale
im mad as hell
fannie mae short sale
fannie mae auction
notice default
postpone auction
fannie mae ceo

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Rainmaker
1,282,430
Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Thanks for the article.  We always learn a lot from Active Rain blogs.  Happy New Year,

Jan 01, 2010 01:35 AM #1
Rainmaker
240,310
MaryBeth Mills Muldowney
TradeWinds Realty Group LLC - Braintree, MA
Massachusetts Broker Owner

Valuable information, thanks for the tip of where to look up where to find whether a loan is owned by Fannie Mae.  Great Information, Happy New Year.

MaryBeth Mills Muldowney, TradeWinds Realty Group,llc Massachusetts

Jan 01, 2010 01:47 AM #2
Ambassador
1,880,194
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Elizabeth, Fannie Mae seems more messed up from what you describe now that it is mainly government controlled. Happy New Year!!

Jan 01, 2010 02:24 AM #3
Ambassador
2,870,408
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

My Senator (Johnny Isakson) who was previously a real estate broker is screaming and honestly Elizabeth I'm a memeber of a group of 100+ people who write/call my representative, the speaker of the house (who finally blocked my email by the way), and my Senator and tell them we're tired of this type of crap and we're not going to take it anymore.  I've been doing this for 3 years.  Feels like it's falling on deaf ears.

Jan 01, 2010 02:34 AM #4
Rainmaker
2,559,863
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

There have been so many things go on these last two years - that quite frankly nothing surprises me anymore!  A system is only as good as those with the power to implement it, and as bad as those willing to exploit it!  I can't recall a time when things have seemed to operate so upside down!

Jan 01, 2010 02:41 AM #5
Rainmaker
605,683
Brian Burke
Kenna Real Estate - Englewood, CO
Broker & Advising Expert-Denver Luxury Real Estate

That's just ridiculous and frankly makes me sick to my stomach. ~Rita

Jan 01, 2010 03:44 AM #6
Rainmaker
255,352
Erin Newington
(916) 585-3858 - Elk Grove, CA
Elk Grove Realtor

Happy New Year Elizabeth! Kenna is right... that is ridiculous! We are never going to fix this problem if they are making rules like that.

Jan 01, 2010 04:41 AM #7
Rainmaker
473,414
Colleen Fischesser Northwest Property Shop
RE/MAX Advantage | Managing Broker - Chelan, WA
A Tradition of Trust in the Pacific NW since 1990!

People did stand up and say they were mad as hell and the media and many in Congress called them stupid and ignored them. One of my senators ignores me entirely, another has a very sugar coated blanket response gently deliverd to my inbox whenever I call or email her. It's double-speak for the most part. All we can do is keep trying.

Jan 01, 2010 05:14 AM #8
Rainmaker
2,189,919
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

We can also skip the legislators who ignore us and go to media. If enough media gets winds of this and investigates, reports on it, perhaps that will stir some action? I tell every newspaper reporter I speak with about Fannie Mae and its shenanigans.

sacramento short sale agent

Jan 01, 2010 06:00 AM #9
Rainmaker
1,142,240
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Crazy isn't it? They really need to get their act together. The short sale decision needs to be based on the net to lender...period. If it's better than foreclosure then accept it and move on. Requiring sellers to miss payments is foolishness.

Jan 01, 2010 09:25 AM #10
Rainmaker
575,553
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

 I don't get the reasoning behind this kind of policy. I get so frustrated when the policies are so difficult to understand. Lets have a great 2010.

 

 

 

 

 

 

 

 

 

 

 

Jan 01, 2010 09:35 AM #11
Rainmaker
262,229
Christianne O'Malley
RE/MAX Realty Affiliates - Reno, NV
Exceptional Service - Delivering Results in Reno!

Requiring sellers to miss payments just to consider them for a short sale is like forcing someone to lie. It's stupid and will likely cause a fallout in the years to come. Then we'll have Fannie Mae bloopers 2.0.

Jan 01, 2010 10:10 AM #12
Ambassador
3,678,725
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Oh my, Elizabeth! I do think that this qualifies as an official outrage!  I keep feeling like, no, there must be some misunderstanding.  Instead, it sounds like a total disgrace!  Yikes!

Jan 01, 2010 10:31 AM #13
Ambassador
1,229,706
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

I have been experiencing some bit and pieces of this new policy already. The chief irony here is that you may submit the package in plenty of time but then the bank takes FOREVER to approve and you have no time to close. Another challenge for 2010. Thanks for posting; it's important news that not everyone has at their fingertips.

Jan 02, 2010 01:03 AM #14
Rainmaker
886,262
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY
Broker-Owner

The government seems to have an inverted Midas Touch, wouldn't you say? It always has been that way. 

Jan 02, 2010 09:49 AM #15
Rainer
16,276
Freddie Gonzales
WEM PACIFIC Investments, Inc. - Daly City, CA
CRS, GRI, RDCPro

Nice information Elizabeth. Have a great 2010.

Jan 02, 2010 03:13 PM #16
Ambassador
2,225,775
Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Forcing a homeowner to go into default before they are able to get relief is ludicrous! This is such a horrible message to be sent out by any bank, anytime. Thank you for passing the message on Elizabeth, there has to be a better alternative. Pat Kennedy sent me over!

Jan 03, 2010 06:26 AM #17
Rainmaker
571,718
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Elizabeth,    Amazing story.  Not sure I see a rhyme or reason to justify this sort of thinking.  Too many sad stories out there !   Happy 2010 to you !

Jan 03, 2010 06:32 AM #18
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