Well, I just sat in on the Fannie Mae webinar where they explained how they are doing short sales. I was struck by the fact that they insist that 1. we leave all short sales as "active" on the MLS even when our MLS service insists that we use things like"pending ss approval". They said they would consider it fraud if we do not keep these as "active".

2. They explained how they come up with their value and if you break through the garbage that they said, it is exactly what we have all thought was going on! They are truly manipulating the market to raise the values. This is a fact that was just proven by this webinar.

You can get the slides right now from the presentation at www.car.org/media/pd/Fannie_Mae_Short_Sale_REP_Presentation_2013_02...

The audio will be available in about 2 weeks at www.car.org/newsstand/news/fannieshortsalewebinar/

The only good thing that we have going for us right now is that we are now able to go around the sevicers and go directly to Fannie if we have issues by going to the homepath site. 

As a personal note. I am so discusted by these folks at Fannie Mae that think they can do what they are doing to this market. They say they are looking at the BPO's and Appraisals and "when they think they are not right, they are correcting them" it makes me sick! IT looks like what they do is go to the MLS, pull of the highest value in the area, whether it is active, pending or sold, or if it is brand new or just updated or whatever the case may be, and using those values to say that the appraiser is wrong. In what universe is Fannie Mae qualified above an appraiser to decide a market value? This is obvious garbage in order to force our market and I am steaming angry about it....also, in what universe do they get to set the standards for our MLS's? When I brought up the issue for setting values high so they could foreclose and put them onto homepath where no appraisal is needed, it went unanswered....of course!

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Comment by Anne McBride on February 25, 2013 at 1:10pm

Fred they don't care!  Our taxes pay their salary which they get no matter what.  They are unskilled, probably in another country and couldn't care less about America or our economy. The real issue here is Washington.  We can keep complaining but until we change the root of the problem we are just complaining.

Comment by Fred Shocklie on February 25, 2013 at 1:04pm

I am having a valuation problem with Freddie Mac. They do not take property condition in account at all. I spoke with a rep from Freddie Mac and he got all aggressive with me and said they don't have to approve the short sale. I said you don't but let me share with you what happened with the last property you ignored my advice on: I had an offer at $50,000 which you refused to take, it is now under contract at $23,000. So which one of us knows this market? You or me? Silence.

Comment by David Jordan on February 25, 2013 at 12:59pm

I'm not defending Fannie/Freddie, but technically, asking agents to keep listings active after there is an accepted contract does not break any civil law, but does violates MLS policy.  MLSs could choose to modify their practices to accomodate this requirement, or not.  If not, then Freddie/Fannie must change their policy if they want their inventory listed on the MLS.

My understanding of CAR's legal policy regarding short sale contracts is as follows: while the contract of sale is technically an agreement between the buyer and the seller and the short sale bank is a third party who must either approve or reject that contract, the short sale bank can leverage their role to the point where they are virtually indistinguishable from the seller.  I was told by a CAR legal rep that it is a case of the "golden rule" - he who holds the note (in this case), makes the rules for sale.  It makes for a very complicated and cumbersome process, to be sure.  That said, our responsibility to get the highest and best for the seller is no less true for a short sale than any other type of sale.  Accordingly, all buyers need to be advised that offer acceptance is conditional, and the seller has literally no control over the process.  The banks want the highest and best, period.  They believe that if a property continues to be marketed and sold even after it is under contract serves their best interests.  It is hard to argue that point.  Of course, it is the buyers that get the screwed, because they can never feel confident that the deal will go through until escrow actually closes.

In my opinion, the bank's ability to renegotiate terms of sale after an accepted offer should be limited to the sale price based on appraisal value, limiting the ability of the seller to walk away with any cash (as they now do), and the exclusion of any side deals or hidden contracts not disclosed involving the principals and/or their agents and assigns.  And, once a buyer has released their contingencies, the short sale lender should be prevented from making any further demands or concessions from the buyer or the seller, or any ability to bump the buyer out of contract short of non-performance.

David

Comment by Charles Rorive - SFR on February 25, 2013 at 12:57pm

Our MLS seems to have found a way to comply with the short-sale lenders "dictates" and still be honest and ethical about a listing:  We have a status called 'Active - accepted SS'.  This way other agents can tell that there is a short sale offer that has been accepted by the seller and is in negotiation with the lender, but that the lender still want us to accept other offers.  On these other offers, we inform the agents that they would be in a back-up or possible multi-offer situation.  Not a perfect scenario, but it helps.

Short sale "politics" is one reason many agents in our area are refusing to do short-sales.  Many of us are waiting for the day that our state's real estate agency steps in and starts to look at these transactions....

Comment by Tiffany Osterli on February 25, 2013 at 12:52pm

In the past week Fannie Mae has forced two of my short sales into Foreclosure. One them specifically due to a value dispute. They wanted the highest market value for the property. My subject property had been badly vandelized by previous evicted tenants. When I forwarded pictures of the vandelism they refused to review the dispute and would not postpone the foreclosure date to review the dispute. This is not the first time it has happened to me and at the current rate, will not be the last. We have to stop Fannie Mae from falsely raising values across the nation.

Comment by Dan Howard on February 25, 2013 at 12:50pm

This issue is going in and out of not just Short Sales and REO's, but also creates somewhat of pure confusion on the part of most involved. Several MLS's across the country have different settings that could be used: pending seller approval, pending backups wanted, that sort of thing. So why leave the property active?

 

My takeaway is simple. First, protect yourself and your license. Period.

 

To comply with not only state licensing requirements, and to appease both the lender and other interested parties, change the description of the property.   Under public and private comments, change your verbage to

"This property has a pending offer submitted." 

Agents who view the MLS systems will know instantly what this is. Buyers who are searching for properties may not know, but then there is the chance of taking the lead and working with the buyer on other properties.

 

This also protects the seller's rights. Within my listing agreements, I disclose the fact that all offers are subject to lender's written approval.  There in lies the issue that the lender has some control over the sale of the property. Most of you may have experienced the bank's visitation to the properties during the short sale process, finding the property vacant, and rekeying and winterizing the home, even with personals still onsite. A home owner just wants out, and the bank will take those actions they require, or at least believe they have the right to require.

 

Please keep in mind that contractually, we work for the seller, and we represent their interests and must protect their rights. Education goes a long way in this. I would suggest that any form of communication be documented and provided to the broker in written form for the overall integrity of the file.

Comment by Anne McBride on February 25, 2013 at 12:44pm

I've been saying this for a couple years now.  Where have you been?

Comment by Judi Fiolle on February 24, 2013 at 4:33pm

II found a way to comply with both Fannie and my MLS on the issue of leaving ss as "active". They have a new status of "active short cont". When I put it up as this, I received calls to view the property from buyers who want to view it but are confused as to whether it is available or not.

Here is my question. How can the seller accept another offer when they are already in contract with a buyer? If we need to submit all to the bank and they must be signed by all parties in order to submit, how do we do that legally?

I could legally submit offers that have not yet been signed by seller but if we are already in contract with a buyer, I do not see how they can enter into another contract for the same property at the same time?

Comment by Judi Fiolle on February 22, 2013 at 12:20pm

Thank you Kevin. I will pass on the Fannie information that you posted here. Mike, this is very good news! We really do need someone to help us with this! Last night I started writing letters to different news outlets in the hopes that someone would pick up the story too. If we all write to the news outlets around the country, we might get a response from at least one of them to expose what is happening. Let me know if there is anything that I can do to help! I will be meeting you at ss con in a couple of weeks and maybe we can brainstorm for a few minutes on this matter. Are you having a personal meeting with group members there?

Comment by Mike Linkenauger on February 22, 2013 at 11:20am

Here is my plan of action over the next few weeks.

1st - I'm going to put together a private webinar next week with many of the agents who have VERY large sphere's of influence.  You guys know many of these people.  I'm going to rally them for support.

2nd - I'm going to create a video explaining all that is going on to the general public in layman's terms.  I'll try to get financial support from those in the above group, but will pay out of pocket if I have to.  HOPE we can find somebody with skills who is willing to offer their services for this very important matter.

3rd - I'm going to write a well through out article, with links to other resources and evidence, explaining what exactly is going on here.

4th - Create another petition with the White House.  This one WILL get 100,000 signatures if we do it right!

5th - Get the video and article VIRAL and get media attention to them.

Well, that's my plan.  Getting this matter exposed to the public in a manner that they can understand is a very urgent matter.

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