Government Controlled Nationwide Real Estate Price Fixing is Here

Reblogger Paul Francis
Real Estate Agent with Francis Group Real Estate

I have no idea why this is not a Featured Post so I re-blogged it when it's become such an issue with all real estate agents who actually have experience with short sales.

Read my previous post from back in October about Fannie Mae's Evil Plot Exposed.

Wake up...

 

 

Original content by Mike Linkenauger

     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.  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.

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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.

 

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Anonymous
Derek

What are your opinions on the Fed putting the interest rate down so low that the money is free ? Cap rates for rentals is doing great in our area

Jan 18, 2013 04:54 AM #1
Rainmaker
135,650
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

@Derek,

Printing up $40 Billion a month by the Fed to buy up Mortgage Backed Securities because the investment returns are so low and nobody else wants to buy them is not a good thing.

Look up Weimar Republic and that's how I feel about it. There is a reason why the cost of living keeps going up.

Then again... for people who know how to use leverage properly.... it's an excellent time to put the things in place to be a future Millionaire. I can pretty much cash flow anything with the current rates.

 

Jan 18, 2013 05:02 AM #2
Rainer
123,415
Mike Linkenauger
Jacksonville, FL
Short Sale Specialist Network

Please suggest the original article/post be "Featured" here on Activerain!!!

And yes, I have an agent on my team who does BPO's for Fannie Mae, and he is NOT allowed to use Foreclosures or Short Sales as Comps!!  It really isn't a "brokers price opinion" when  the brokers opinions DOESN'T MATTER and they use unethical means to place a false value on a property. 

Its like saying "give me your opinion, but it has to be the opinion I tell you to give me"!

This is scary! I just mentioned on a webinar Wednesday the reality that Fannie Mae may be plotting deeper!  I noted the fact that for Homepath financed Fannie Mae REO properties, they don't need an appraisal at ALL! This is and ADVANTAGE for them to foreclose and "name their price".

I also noted the fact that last year Fannie Mae Fired ALL of their 3rd party REO asset management companies and now does ALL REO outsourcing directly themselves.  This is HUGE, and will mean MILLIONS more properties directly financed using HomePath if they "push" homepath even more! 

Now, as Fannie Mae has recently partnered to do direct short sale listing assignments, COULD the NEXT step be that Fannie Mae starts offering buyer appraisals for FREE for SHORT SALES if buyers use their Fannie Mae Homepage financing??

Mike

_________________________________________________________________________

Here is an email that an agent on here just sent me that further helps make this a big possibility:

"Mike your post is very timely.  I am working a short sale with PNC Mortgage and they said Fannie Mae is the investor.

PNC mortgage ordered a BPO and then they came back with a high value that I feel is out of line.  I spoke to the agent afterwards that did the BPO and he stated he was INSTRUCTED to NOT use and short sales in the BPO.

Didn't we already go through this junk before?

I found it so interesting that Michael J. Williams the former CEO of Fannie Mae who just stepped down from Fannie Mae joined the board of directors at Prospect Mortgage.  The CEO of Prospect told me this himself.  HMMM is it because Prospect Mortgage is the largest Homepath lenders?  Gee does Prospect know some inside information from Mr. Williams?  Is Prospect getting preferred treatment?

Why is Fannie Mae trying to falsely inflate value?  In the past I have contacted the Appraisal Institute and their team of attorney's over this stuff.

It is not ethical to inflate the values by NOT using short sales.  I told the manager at PNC I will be back when the lender's appraisal does not come in.

What is your course of action?

sincerely,

Catherine Gheen"

Jan 25, 2013 11:40 PM #3
Rainmaker
135,650
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

@Mike,

Suggested a feature for your original article the day I re-blogged your article!

I was talking to one of the negotiators for a bank handling one of my short sales going over the values and he straight out told me that the "investor" (Fannie Mae) is adding to the BPO'S/Appraisals because they think values are going back up in the future. Told me straight out the Appraisal came in at $80,000 but they (Fannie Mae) will only approve the short sale at a $90,000 price.

I've got several other similar scenarios but the one mentioned above is the one where the negotiator flat out honestly told me what is going on.

Probably right about values going up... certainly in the Las Vegas market with what's been going on but buyers want TODAY's Values... not next year's value.

 

 

Jan 26, 2013 07:21 AM #4
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Rainmaker
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Paul Francis

Las Vegas Real Estate Agent - Summerlin Homes
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