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Government Controlled Nationwide Real Estate Price Fixing is Here

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     If you are a Realtor or short sale negotiator who has done a short sale with Fannie Mae as the investor during the last few months, this blog post will likely raise a question or two.  For Fannie Mae Real Estate Price Fixingeveryone else, it will definitely also raise an eyebrow or two. Government conspiracy theorists are certainly not a rarity in this day and age. Depending on who you speak to, many of our fellow citizens can come off as paranoid and irrational when speaking about all the secret plans they seem so sure our government and those in power are plotting and planning. While the theory I'm proposing on here is certainly not up to par with the New World Order, Illuminati, One World Government folks, it is certainly some concerning and valid food for thought, especially for those of us in the Real Estate and Mortgage industry.  Take a few minutes to read this blog post, and you'll likely agree and come to find that this really isn't about a conspiracy theory, but a very real and disturbing trend that is happening in our housing market right now.
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     Lets take a step back here and set the stage.  Over the last five to six years, we have seen real estate prices plummet in virtually every market across the country. This reality of the depressed housing market is certainly no secret. In many areas, prices have declined to as low as thirty cents on the dollar. Several years ago, As things became more and more depressed, our government stepped in.  Both Fannie Mae and Freddie Mac, who back the majority of our residential mortgage loans, were completely bailed out by the US government.  This forced overtaking was something that our government had to do, as the imminent collapse of Fannie and Freddie would have meant the complete collapse of the housing and finance industry, likely permanently.  This was extremely important, as instead of giving bailout loans to Fannie Mae and Freddie Mac, like the auto industry or the banks,Government Real Estate Price Fixing they actually took complete control of these organizations.  Our government then established the Federal Housing Finance Agency (FHFA) to "oversee" these organizations which are now referred to as Government Sponsored Enterprises, or GSE's.  Since then, the FHFA consistently dictates policy to these Government Sponsored Enterprises that still back over 60% of residential mortgage loans and completely control the secondary mortgage market.

     Now back to the present.  Fantasic news headlines in much of the country that in many of the markets that were hardest hit, prices now seem to get going up almost as quickly as they were once declining. Inventories are low, demand is high, properties are getting multiple offers from buyers paying over list prices the minute they come on the market.  But for those in the industry such as myself who are active in the short sale and distressed property niche, an interesting and disturbing practice that has been taking place.

Fannie Mae inflated BPO     In very recent times, just in the past few months, short sale agents across the country have been having difficulties with Fannie Mae short sales.  To be more specific, the difficulty has been with wildly inflated appraised property values that Fannie Mae has been insisting on for short sale properties. For those who may not know, we are not talking about regular appraisals, traditionally ordered by a buyers lender in order to justify a purchase price.  In this case, we are talking about appraised values that Fannie Mae places on properties, ordered by them and completed by their own appraisers, utilizing their own appraising and property valuation methods.  Utilizing these over inflated appraised values, Fannie Mae then demands more money for these short sale properties from patient buyers.  Anyone starting to smell the stink yet? Does this stink smell a little similar to the stink we all experienced several years ago with inflated buyer appraisals from before the housing market collapse?

Fannie Mae Inflated appraisal     For the most active short sale agents across the country, the past few months have produced quiet a few headaches with Fannie Mae.  It seems virtually every property valuation and appraisal done by Fannie Mae for a short sale is at least 10% or more above current market value.  Values so inflated, that there are typically no comparable sales at all to come remotely close to justifying their prices.  Prices so high, that it most cases it would be virtually impossible for a buyer to find a loan and get an appraisal that would match the property values and prices that Fannie Mae is demanding.  The ironic part, is that these same buyers' loans who are purchasing these properties would of course eventually be sold off to... You guessed it, Fannie Mae! Because of the massive number of loans backed by Fannie Mae, this is widespread and is effecting a very high percentage of current sales.  I manage a short sale broker network of over 12,000 agents and have directly assigned thousands of listings to agents in every State.  This is happening everywhere, and is also happening with Fannie Mae bank owned properties as well, as many agents are also reporting.  And when it comes to disputing these inflated values, it can be quiet a challenge for real estate agents and short sale processors to convince Fannie Mae to change their mind and sell the properties for actual market value. Even more frightening is the reality that after rejecting short sales by demainding their over inflated, false "values", when Fannie Mae does finally foreclosure on home owners, they are strongly encouraging buyers to use Fannie Mae HomePath financing, where an appaisal isn't even required!

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     Put two and two together, read between the lines, and it makes perfect sense that this is just Fannie Mae's and our policy dictating governments' valiant and likely effective attempt at mass, government controlled real estate price fixing.  Control the supply (market inventory), control the demand (interest rates ect), and then control prices and force up property values by demanding more money.  Fannie Mae and Government controlled real estate price fixing.  The tail wags the dog, and the dog has no clue what is going on.  A perfect example of the reality that housing has become completely socialized, but with the illusion that its just all part of the market cycle.  Just my two cents, for what its worth.


Here is a petition to the White House that you can sign online - http://wh.gov/VY24.  Two minutes of your time to share this article and link will make a difference! Please help get the word out, we must stand for anything or we will fall for anything.

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Comments (48)

Mark Karten
Highline Residential - Manhattan, NY

Hey Mike,

Thanks for bringing this up in detail again.

I wrote about this in ActiveRain on 10/28/12 and it was a "featured" blog with over 160 comments - here's the link:


I recently disputed the counter on a Fannie short sale and submitted a valuation dispute.  A representative from Fannie Mae called me back and told me, "We don't use comps to set the value for the property as we have a certain minimum we need to meet."  Needless to say, I went off on her, and said that "every underwater homeowner has a certain minimum to meet - it's called their mortgage balance!"

I hope that the efforts you and other agents commenting and the petition get the job done!  I'm working with a network news program to try and get them to do an expose as well.

Much appreciated,


Jan 27, 2013 11:22 AM
Mike Payne

Without doubt, Fannie Mae is guilty of "price fixing" in Sarasota, Florida! Right now, I am fighting Fannie Mae on 2 short sale listings with INFLATED valuations. We agents (trying to help) property owners across the United States all can agree to Fannie Mae "fraud," but the bigger question is, WHAT CAN WE THE PEOPLE DO ABOUT THIS? I fear there's NO oversight of Fannie Mae.

For weeks, Fannie Mae claimed they'd never received short sale "application" & documentation from Bank of America (Servicer). For several months, Fannie Mae & Bank of America played the "blame game," each blaming the other. If I didn't know better, I'd claim ineptitude. However, I've been at short sales for many years. I know better.

Banks and GSE's know exactly what they're doing - NO INEPTITUDE.

What we AGENTS are facing is a NO-WIN battle on behalf of beleagured property owners looking to us for help. Seriously, THEY (government) already have implemented their foolish plan to "fix" prices. Mike, you already have all the corroboration from agents throughout the country - same inflated values; same stone-walling; same result - foreclosure & HomePath. 

On 2 current listings, I'm still fighting:

1. Both borrowers paid for FULL INSIDE APPRAISAL.

2. Both borrower procured detailed, legitimate repair quotes from licensed contractors.

3. Both buyers offers 100% appraised value CASH offers.

Should be slam dunk, right?

Fast forward several months. Servicers didn't help. Fannie Mae didn't help.

I then shared all empirical evidence with the agency responsible for oversight of Fannie Mae - see below: 


The office that has oversight over Fannie Mae is the Division of Enterprise Regulation.  The person to contact in that office is Owen Lennon.  He can be reached at 202-649-3287.  E-Mail address is owen.lennon@fhfa.gov.

To Mr. Lennon, I sent the following email (some info redacted for privacy):


"Mr. Lennon,

I am a real estate agent in Sarasota, Florida.

On 2 current short sale listings (& 3 listings in the last 12 months) property owners and I have faced “perceived” fraudulent Fannie Mae property valuations.

For months, I’ve sought help by working within the system…to no avail.

Fortunately, Ms. Lenora O. Morton of the Federal Housing Finance Agency referred me to you for help. On 2 short sale listings where I’m trying to help property owners avoid foreclosure, Fannie Mae refuses to acknowledge empirical evidence pertaining to value.

Two days ago, a local real estate agent hired 2 weeks ago (as the 3rd valuation for this same property) by Fannie Mae to provide valuation (bpo) at [property address removed], admitted (off record) that Fannie Mae gave him a hard time on his report.

According to this agent, Fannie Mae:

  • Rejected his valuation (bpo) 2x for including short sale comparable sales.
  • Rejected his valuation for including more than $10,000 in repair costs.

 Fearing loss of work, this agent complied with Fannie Mae’s directives, submitting a report showing value of $130,000. Agent claimed if allowed to submit a report at true market value, his report would have been much lower.

 As it is, Fannie Mae rejected current buyer’s offer at fair market value, demanding $150,000 and recommending a list price of $162,000 - a ridiculous $39,000 ABOVE what an 30-year licensed LOCAL appraiser says property is worth - see included full inside appraisal.

 As a Government Sponsored Enterprise, how is Fannie Mae allowed to waste taxpayer money?

 This is only 1 of 2 properties I’m currently listing with similar valuation madness, caused by Fannie Mae. Locally, more and more of my colleagues also are complaining about “perceived” fraudulent valuation practices perpetrated by Fannie Mae.

 Nationally, real estate agents with whom I mastermind also are facing similar Fannie Mae valuation issues.

 For months, I have attempted to work within the system, resolving to contact Mr. Mayopoulos’ office and/or any other executives aligned with Fannie Mae. To date, I’ve heard from a manager (My Huynh) with the Sacramento Mortgage Help Center. Unfortunately, she indicated the MHC cannot help…with no explanation offered." 

Last Thursday (1/24), Mr. Lennon emailed me the following appeasement. Do I expect any "fair hearing?" Hell no. I NOW expect both property owners to LOSE TO FANNIE MAE'S FORECLOSURE FRAUD.


As a business person, I should throw in the towel. I realize continuing the fight is foolish of me.Too many of us agents who give a damn about helping people (and hopefully getting paid a couple dollars for our much-appreciated and much-deserved tireless work) don't want to quit until we're pinned to the mat.

Mike, you have a HUGE network with more voice than any of us. Where do we go from here? Does anyone here think NAR will agree Fannie Mae's price-fixing fraud is horrible for national real estate market?

I won't hold my breath with the National Association of Realtors doing what's right.

If anyone is interested in more details, please call me at (941) 914-9980. Until now, I've been very successful with helping property owners avoid foreclosure. My team has overcome incredible obstacles with short sales heading for derailment. But this obstacle has me worried - I don't see any way to expose Fannie Mae (aka "US Government").

For homeowners desperate to avoid foreclosure & certain deficiency judgment, I pray we can expose Fannie Mae's fraud.


Mike Payne
Real Estate Agent (Sarasota, Florida)

Jan 27, 2013 12:10 PM
Mike Payne

PS - To my email above (#33) asking for HELP from Mr. Lennon, the person/office supposedly overseeing Fannie Mae, Mr. Lennon responds with the following email:

"Appreciate your reaching out to us and we will forward your complaint to the appropriate staff at Fannie Mae so it can get a fair hearing."

What are the odds my email hit the shredder in a nano-second after Mr. Lennon emailed me his conciliatory response?

PPS - a friend of mine is the voice of real estate investors throughout the US. He commands an audience of 200,000 - 300,000 subscribers. Next week, he's asked to interview me re: Fannie Mae's "perceived" price fixing & foreclosure fraud.

Everything I say can be supported with empirical evidence. All I can do at this time is share the facts & hope the entire country wakes up to what's happening & demands oversight/termination of this dangerous "fraud."


Mike Payne
Realtor, Sandals Realty
Sarasota, FL
(941) 914-9980


Jan 27, 2013 12:23 PM
Sharon Sanchez
Ace Home Realty - Carson, CA
Your Number "1" Source For Real Estate.

Hi Mike,  You may be on to something.  I completed a BPO based on the clients guidelines, but that wasn't good enough.  I received a call stating that their client thought the property was worth more and that I needed to replace some comps with comps that sold within a year instead of 6 months.  I was wondering what the heck is going on.

Jan 27, 2013 12:50 PM
Wendy Smith
Wendy Smith Real Estate - Clearwater, FL
Real Estate Advisor

well written Mike - it is on my schedule to write a blog post with the very same topic but you beat me to it!  Thanks for the link to sign the petition - I'm going there next and then the link is going to everyone in my network,  Thanks again.

Jan 27, 2013 09:11 PM
Connie McGregor

Mike ~ Your flow of words is right on!   Just for the very same reason you expressed,  I have personally rebranded my real estate business in the  North Scottsdale and Carefree Arizona to our traditional market....my niche is luxury home sales.  My daily review/analysis of our Phoenix metro market has proven that I have been spot on with my business plan for 2013 to close my door on short sales...and enjoy a positive work environment.

Good luck in your efforts getting your message heard with positive results.

Connie McGregor

Realtor, GRI

Russ Lyon Sotheby's International Realty

Carefree Office

Scottsdale, AZ

Jan 28, 2013 12:21 AM
Mike Linkenauger
Jacksonville, FL
Short Sale Specialist Network

Mike Payne, let me know if I can contribute in any way, I have quiet a few short sale brokers throughout the country.

Thanks everyone for taking the time to comment on this and address this issue.  NOW is the time to take action and make a difference!  Here is a petition we are putting out directly to the White House! First, Please go here and sign this petition demanding that Fannie Mae SHAPE UP NOW!

Go Here!


We are up to 150 today already, but need MORE!! Please help get the word out and tweet and FB this link!

Jan 28, 2013 01:12 AM
Mike Payne

Thank you, Mike L.

UPDATE - I don't believe in coincidence, so my DETAILED complaints filed w/ federal agencies and elected politicians AND my social media campaign to bring awareness to this CANCER must have ruffled a few feathers at Fannie Mae.

Today, 4 different people in 4 different departments of Fannie Mae have contacted me. Disregard the fact I'm asked to provide the same empirical evidence of valuation I've provided myriad times before.

I'm okay with providing all of it again.

At the end of the day, these property owners and I might just be strung along again...with Fannie Mae refusing to budge off its factually INFLATED valuations. At that point, I don't know what else I'll be able to do to try to help these good people.

Might be that Connie McGregor's decision to remove herself from short sales is the wisest counsel of all. I know from a business standpoint, my work helping property owners avoid foreclosure has been the worst financial business mistake of my life. All of you know exactly what I'm saying: we invest our time and money upfront on a short sale that may NEVER close, even though we've done everything right. And if a short sale closes, everyone waits for MONTHS. Helping people out from a heavy boulder is gratifying, but....

With your permission, I'll keep you updated on my own Fannie Mae struggle. With hope, I'll offer something that helps others with their own Fannie Mae struggles.

Mike Payne

PS - Mike L, we sincerely appreciate the noble work you've done to HELP countless property owners and real estate agents navigate their increasinly murky short sale waters. THANK YOU!



Jan 28, 2013 02:32 AM
Gordon Cuffe
Realty First - Rocklin, CA

You are 100% correct. I am in the Sacramento CA market and now values are increasing as much as they did back in 2004, 2005. I am predicting that values will increase at an higher rate than in 2004 because we have fewer homes for sale compared to 2004. It is sickening to see this because buyers cant even buy their dream home because homes are getting 20 offers on them. It looks like we will get another bubble here but this time the values will not go as high because we dont have any 1% option arm loans, or stated income loans. I feel bad for the homeowners who buy at the top of this cycle because they will stuck with a home that is worth more than the loan balance and will have zero options for moving or refinancing. We need to get the entire current administration out of office. You can see the graph at how sharply inventory has decreased at http://www.findhomesforsaleinsacramento.com/

Jan 28, 2013 05:29 AM
Mike Clover


I received this link today and wanted to comment on how to fix this current problem. If you get a client advise them not to buy a Fannie Mae foreclosed property due to the inflation issue.. We all know the government is the cause of most issues in this country. The government is their own worst enemy. When government interferes with a free market we have these kinds of issues.




Here is a good read from one of my writers….about the current issues affecting everyone due to big goverment....








Jan 28, 2013 06:37 AM
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

"Fearing loss of work, this agent complied with Fannie Mae’s directives, submitting a report showing value of $130,000. Agent claimed if allowed to submit a report at true market value, his report would have been much lower."

Quoted from Comment #33..

Sounds like the good ole WAMU and Indymac days where Appraisers would make it appraise because they did not want to lose their business.

Jan 28, 2013 01:49 PM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Mike, my husband was just talking about this very subject and has noticed it on his Fannie short sales as well. -Kasey

Jan 28, 2013 03:23 PM
Alice Fuller

Were any Realtors on the "Freddie Mac Standard Short Sale Overview" today? If you were you would have to agree  that GOVERNMENT CONTROLLED NATIONWIDE REAL ESTATE PRICE FIXING  is here!!!!

Jan 29, 2013 04:51 AM
Thomas Biggs
Long & Foster Real Estate, Inc. - Bethesda, MD

Mike Payne and Catherine Myers must be living in my shoes!  This is more than a disturbing trend.  It is here.  It is now.  It must be stopped and we must shine a light on all of this.  It makes a sham of our business and our industry.

Jan 29, 2013 12:00 PM
Mike Payne

Mike & others,

Here's what EVERYONE of us should be doing to expose Fannie Mae's "price fixing" strategy > http://www.srqmagazine.com/JMailer/SRQDailyV2LeftContent.cfm?conID=6279&masID=3164

In one week's time, my persistence is paying off as several noted social media superstars have shared my Fannie Mae experience. Most importantly (and I don't wish to get ahead of myself), I received a phone call yesterday (2/1) from an upper-level executive with Fannie Mae.

I now am cautiously optimistic about my two short sales caught up in Fannie Mae's price-fixing vortex. I hope to have good news to share next week.

On behalf of desperate property owners relying on us for help, we MUST remain vigilant, doing whatever we can to help.

Enjoy the weekend!

Update forthcoming....

Mike Payne
Sandals Realty
Sarasota, FL 34233


Feb 02, 2013 01:21 AM
Mike Linkenauger
Jacksonville, FL
Short Sale Specialist Network

Great job Mike! Please sign our petition if you haven't already!  I'm going to work on a brief video explaining all of this next week so we have something we can help get "viral" and get more attention to this matter AND get 100,000 signatures on our petition! Here is our White House petition if you haven't signed already - http://wh.gov/VY24

Anyone have a good videographer who may want to help a worthy cause???

Feb 02, 2013 01:36 AM
Ric Mills
Keller Williams Southern Az - Tucson, AZ
Integrity, Honesty, and Vast Real Estate Knowledge

This is the trend, unfortunately.  The price they come back with is a figure from no where , just a guess and has nothing to do with market value.  Every price dispute we have put in so g=far has been declined and those properties will not sell at that price.  We have already tried.  All of them will probably go to foreclosure.  It is really sad when Freddie and Fannie think they know more about selling Realestate than the agents.

Feb 03, 2013 10:20 PM
Mike Linkenauger
Jacksonville, FL
Short Sale Specialist Network

MUCH more evidence of this has come out in the last couple weeks.  Fannie & FHFA have pushed for streamlining of Deed in Lieu of Foreclosure AND are pushing State Governments to speed up foreclosures.  This is unfortunate and unacceptable.  Even a bigger outcry, should be that the people of this country really don't care that this is going on.  They are happy for their "appreciation" of their own property, and could care less about the details.  Here is our petition to the White House again if you haven't had a chance to DEMAND accountability for these things and voice your opinion - https://petitions.whitehouse.gov/petition/force-fannie-mae-behave-responsibly-or-shut-them-down/vtY71bhk

Feb 19, 2013 03:02 AM

Mike, Fannie Mae, in only one of the major players participating in the price rigging scheme.  Look at all the other banking institutions that continue to grudgingly divest themselves of their "shadow inventory"!  Do you think it is an accident that they all are putting a stranglehold on release of this inventory to the public?

No, they know exactly what they are doing!  By keeping their collective available inventories minimal, they can effect supply thus ginning up greater demand and above market price offers!  The "price fixing" mentality is now rampant among all monkey-see / monkey-do Bankers.  They are collectively colluding against the public to manipulate the real estate market just like they did back in 2005-2006!  Prices are not realistic for the market conditions and will soon Bubble....then pop just as in the previous Bubble!

The problem is systemic with FNMA, our Government sponsored and controlled entity, as a major facilitator and antagonist!  They are buying time.  They know that this will not last. 

BTW, where is NAR in all of this?  Seems they would rather back the status quo than stand up for changes that must be made!  NAR spends over 20 million dollars annually on lobbying, yet they remain silent to these real estate manipulations that continue to infect our market!

The recent and ongoing attempt of the Government to disarm Americans is reflective of the Government's inside knowledge of the pending economic devastation!  A last minute attempt by the Government to "level" their playing field and eliminate their perceived anticipation of an armed backlash by American Patriots who will no longer tolerate their unlawful and unconstitutional manipulations!

I do not pretend to know how bad things will get, but they will have to get worse before they get better based on these continued market abuses!


Mar 07, 2013 02:24 AM
Ronnie Williams
Berkshire Hathaway Home Services - Stuart, FL
This is not only happening with short-sales but foreclosed Homepath properties, also. I have put in two offers on the same Homepath property for a client. The property was originally priced at $124,900, almost $50,000 above the last closed sale (6) months. There were two comparable properties, same square footage, same house design, and same location, next door to each other. One closed at $70,000 while the other at $75,000. I submitted our 1st offer at $75,000 with comments about the other sales and questioning an appraisal. The response we got back was a multiple offer situation, submit your highest and best, we went up to $81,000. Our offer was rejected. Property was still active. Called listing side and they told me other buyer rescinded their offer. Since then price was reduced to $114,900. We then submitted a new offer $81,000. Buyer is putting 25%down and pre-approved. We then got notification of multiple offers, again. Very coincidental! We upped our offer to $90,000. Four days later we got a rejection notice. Spoke to listing agent to see if they accepted other buyers offer, he said bank countered closing date but was pretty sure the buyers would accept. Three days later, property is still showing available. We are going to go in for a third time except we are going to use Homepath financing to see what happens. We are not going any higher then our last price. What do you want to bet there will be multiple offers? This seems fraudulent to me. I question whether we were ever in a multiple offer situation. It seems as though this is a tactic Homepath uses to get a better price. I would like to hear if anyone else has had this experience.
Oct 30, 2013 08:54 AM