Now it's Freddie's turn.  without going into details, I have confirmed with management at Wells Fargo that Freddie Mac is countering 15%-20% above the BPO/appraisal value they obtain. The reason they give is that if they feel the property is in a climbing market, then they want the buyer to pay that price.   Or they feel the seller can bring in the difference.

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Here in California, that is not allowed by law. .On the latest declined short sale, the BPO value was $335,000.00  The buyer's appraisal came in at $330,000.00 and was used to dispute Freddie Mac's counter of $407,000.00 which required a net of $373,000.00.  This issue needs to be addressed by NAR  asap. Freddie Mac, as did Fannie Mae, is encouraging foreclosures as a valid buyer obtaining financing will not waive the appraisal contingency and bring in the additional cash.

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We are having the same problem here in Illinois.  Did you enter the dispute on the Homepath portal?  It is ridiculous that you have a bank appraisal supporting the lower value.

All dispute paths have been explored   I spoke directly to Freddie Mac and they confirmed that their new "model" is to require net proceeds that exceed current market value if the property is in an increasing market.  I now have to tell agents here in California  that they may be just wasting their time listing a property where the loan is owned by Freddie Mac for a short sale

I had the same experience with Seterus and Fannie. I disputed Fannie's BPO value and finally went down only $20,000. $275,000 to $255,000. and they don't give any formal counter and buyers are skeptical about the countered values.

The only short sales I have lost to foreclosure are Freddie or FNMY.  They have an internal idea that the price they can get at foreclosure has a higher net than they get from your value from the buyer.  This started with the increases in values.  The problem is that they are 6 months behind with their plans.  Now we have more inventory and that will stabilize prices.  So, in another 6 months they will change their policies again and then again.  It's the most frustrating position an agent can be involved with.  I've completed 150+ short sales and I've aged 20 years in the last 4

It's been going on in SW Washington for 2yrs. with Fannie.  I've been on a national conference call with the head of the short dept. (used to head the Asset Mngmnt Dept).  He denies this goes on.  Then refers you to the Homepath site for appraisal dispute.  Just furthering the delay as they move forward with the foreclosure process.  I have had some success with appraisal disputes with Fannie however you must have your own BPO or appraisal, contractor bids for repairs, and anything else you can provide to justify the actual value comparative to their nonsensical figure.  Unfortunate that now Freddie is starting the same practice.  Complaints to state attorney generals would be a start.  I'm in the middle of one now with Ocwen's requirement to deal with Hubzu.  If we all encourage our clients to push back at the state level these practices too will change. 

Here in the (east) Bay Area, REO listing are listed at prices at least 20% over market value. They then reduce the price every 90 days or so, until finally they are close enough to market value when people write offers. I see the same on BPO's, where they claim the BPO is much higher than the offers received on short sales. Of course, they do not share the BPO value with anyone. In my opinion the whole short sale and foreclosure process needs to be reviewed and changed. NAR should be doing much more about that ( and so does CAR). But lets face it, when has CAR or NAR done anything positive for the real estate industry, more specifically real estate agents? One thing we should all have access to is the BPO. The banks ( all of them) should be forced legally, to make those available.

since the BPO fee is added to the borrowers debt, the borrower should definitely have access to the BPO.  Especially since the BPO has an impact on the lender's decisions which directly affect the borrower

If we just assume for a minute the BPO is "valid/correct", then yes, we should all have access to it, including the appraiser if there is one involved. But here is suggestion: the listing agent already did (or should have done) a BPO before the property was listed. Banks could make it a requirement to list a short sale property with an extended CMA (BPO), so that the whole BPO process is bypassed as it all takes time, and one might get an agent from out of town for the BPO which does not help at all.


OK, so when the Freddie & Fannie short sales are not successful, the other options are maybe a DIL or foreclosure.  If Fannie or Freddie perceive the market to be increasing, then (to them) it makes sense to force-foreclose or offer DIL ...then put the property on the market with the Homepath financing (remember - no appraisal required) --- how many unsuspecting buyers are purchasing property at the inflated prices because financing & paid-closing costs are so easy?  

So, fellow Realtors, we are doing the task of document-collection for the servicers of Fannie & Freddie loans - free of charge.  Realtors are not compensated for all the [loss mitigation] due diligence done for the benefit of the servicer/investor.

Not only do we do their work, but we scramble to meet unrealistic (Equator) deadlines, supply the docs over & over, etc etc.  

There must be a way that Realtors can help the homeowners facing forced-foreclosure.  I haven't found it yet but there must be a way.

As usual the lender community keeps acting like the dumbest private sector seller.

But please explain why your website internal link says 40% of all listings are short sales.  If that is true, there must still be places where short sales are 100% of sales - because here in my part of Oregon all distressed sales do not amount to even 10%. 

Are you sure that 40% number still applies?

In Alameda county, there were 12710 properties sold in 2013.

Only 739 were real short sales (not REO's).Or about 6%,


I have lost over $700,000 in sales due to this reason.  3 short sale properties that were Fannie Mae or Freddie Mac, each property was $10,000 - $70,000 over market value and eventually these properties were forced into foreclosure.  I disputed the valuations with Freddie Mac and their supervisor reached out to me to tell me that I was lazy, not marketing the property correctly, the sellers should not have an attorney negotiating their short sale.  I told the attorney negotiating the short sale who happen to have a relationship with a Freddie Mac executive.  She promptly called that person and I received a call a few days later with a half hearted apology for the "misunderstanding" that it was not Freddie Mac's position at all.  In the end they pushed the sellers into foreclosure.  This practice is damaging the sellers and needs to be addressed.



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