FNMA Rejects Short Sale Offer, Spends Money Foreclosing, Then Lets House Sit.

This sad tale happens over and over again.  FNMA required my sellers to contribute $3,000 to close the short-sale.  As a family of 6 whose sole wage earner lost his job, they didn't have the money.  Both realtors agreed to pay the $3,000 from our commission.  FNMA, through Bank of America, declined our offer to provide the funds and refused to approve the short-sale stating "the funds must come from the seller".  This was nothing short of punitive.     I sent an email to the head of Loss Mitigation for both Bank of America and FNMA.  Never received a response and the short-sale was declined. The home is now sitting vacant waiting for approximately 4 more months for the foreclosure sale.....in an area with over 250 pending foreclosures and declining market values.  Unbelievably poor decision on FNMA's part.  Is it any wonder they are in trouble?

Dave - Unfortunately common sense and real estate don't seem to go hand in hand these days.

Dave,

this does happen daily everywhere... I have several FNMA properties right now that sat for over a  year vacant before listing. I don't know what the hold up is, but it costs them money!! (therefore it costs us money)

It's the government, Dave. Makes perfect sense. It's how the government operates. On the one hand you've got the government saying it doesn't want to foreclose and take your home. On the other hand, it's telling people to stop making their mortgage payments or it won't approve the short sale and then Fannie Mae swipes the house anyway. Why? Because it makes more money foreclosing due to all of the government incentives it pays itself. It's incest.

Typical government - big corporation nonsense.  Clerks following policy set by idiots.

It doesn't make any sense.  I had a short sale and the bank (not Fannie Mae though) wouldn't accept the offer.  It just sold last week at the auction for much, much less than the offer they rejected.  Completely illogical.

Dave, this sounds like just an average day in the world of real estate...there was another one in my neck of the woods that had multiple all-cash offers on a short sale, was contingent for months...then the property sold at auction for more than $65k less than the full asking price! Doesn't make sense, but as it's been said many times (and by Michelle in comment #3), common sense and real estate don't go hand in hand these days. :)

Leilani

I would like to say this is unusual, but I think more and more banks are listing to unreasonable BPOs by agents that are hoping to get the listing as a foreclosure. I think the government needs to stop feeding the beast and let them take their lumps when they take a loss. What is happening is everytime a house forecloses, the government is giving the system more money for their loses, they have no incentive to do a short sale.

Dave - I see this happen way too much and it makes no sense.  In a similar vein I had clients put in an offer on a Fannie Mae REO.  They offered $900 below list price, cash contract, no contingencies, two week closing, use their own attorney to close.  Fannie Mae countered at full price, with their attorney to close.  My clients got mad and withdrew their offer.  One month later Fannie Mae dropped the price $15,000 and several weeks after that it went under contract and finally closed.

Hi Dave,

I have been listing FNMA foreclosures lately. My experience has been that the auction is on Friday, the property is assigned to an asset management company on Monday and I am assigned the listing on Tuesday.

They want the occupants out and the property fixed up and put up for sale as soon as possible.

Phil