Fannie and Freddie Do It their Way

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Fannie and Freddie Do It their WayFannie and Freddie Do It their Way

Short sale and foreclosure home buying has become quite the norm after the real estate world hitting rock bottom a few years back. Some agents have gained more hands on experience dealing with these buying processes than they ever could have imagined. Usually, when all steps are followed, things go as planned. Everyone, from the buyer-to the seller-to the lien holder, is happy. Agents get the job done. Lately, however, there seems to be something sour in the milk.

A mini epidemic seems to be in the midst for being turned down on a short sale, despite following all regular guidelines. The investor, Fannie Mae or Freddie Mac, are totally dropping the ball due to irrelevant reasoning. Obviously, “big business” can call their own shots these days, but shouldn’t they be expected to consistently follow mandated guidelines, at least? I mean, the buyer, seller, agent and lender all have to adhere to these regulations. Right?

Having everything in place and ready to roll, only to be derailed due to “issues” from Fannie or Freddie, seems very unfair. People are not even getting the courtesy of a reply when F&F have tons of people waiting on them. This is not only bad business, it leads to declined offers and foreclosures being pushed through. It also appears that Fannie is intentionally turning down honest cash offers while overvaluing these homes. They’re basing the value of distressed properties on the sales of traditional homes within the last year. It’s not supposed to work this way. Foreclosures and short sales are comparable with other foreclosures and short sales, and usually they go back in the public records a maximum of 6 months to do this comparing. So, why the sudden change in procedure?

 

Who’s Afraid of the Big Bad Business?

Well, quite frankly, most of the general public. Not only are Fannie and Freddie a government backed entity since their 2008 taxpayer bailout, they still control all but 1/3 of America’s mortgages.  Would you really want to take them on knowing that? Me either. They are both currently out of the red in their financial departments due to a recovering housing market and plan on paying out the $153,000,000 settlement from 2004 in the near future. So, let’s go over that one more time. They are in the black, yet they don’t know exactly where these funds for settlement payment will come from. I think I might know. Recent history suggests that taxpayers get ready to open their wallets once again.

 

There’s been an abundance of discussion on the new “normal” in this industry when dealing with the “M’ sibs. Google it and you’re bound to pull up hundreds of articles and blogs. While no agent or investor has an inside scoop into this big corporate world, they are experts in their own fields seeing these changes happen first hand. It seems Fannie and Freddie are back to being self-driven and out for themselves versus trying to help and benefit the public who saved them. There’s been talk that the two will be merged into one soon. Also, they could possibly become fully ran by the national government. What kind of gaps will there be in the system if this happens? Unfortunately, we’ll all have to wait and see.