Las Vegas, NV – February 4, 2013 – (RealEstateRama) — Why is Fannie Mae countering short sale offers so high above market value? For the past few months, short sales with Fannie Mae as the investor are being countered by banks 20 to 30 percent (average) above fair market value. Is this the banks fault? Not necessarily. Banks servicing short sale files with Fannie Mae as the investor must follow the guidelines set forth by Fannie Mae.
These high counter offers are causing many problems for homeowners trying to do short sales. The biggest problem for Realtors is that these inflated prices make it virtually impossible to find a buyer. Buyers obtaining financing may not be able to get a loan due to the fact that the home won’t appraise. Additionally, most cash buyers and investors will not agree to pay for a home priced so high above market value. When the homeowner cannot find a buyer, Fannie Mae forecloses, takes back the property and relists the house (20 to 30 percent above market value) as a HomePath (Fannie Mae owned) REO property.
How is Fannie Mae able to sell these homes and find buyers willing to pay prices so high above market value? They are offering buyers the ability to purchase these homes without an appraisal as a HomePath property. HomePath properties do not require an appraisal if the Buyer chooses to use HomePath financing. Additionally, they are selling these homes for 3% down, no mortgage insurance and sometimes contributing towards the buyers closing costs to make the deal seem even sweeter. This enables Fannie Mae to sell homes for more than they are worth. The downside is that Buyers are purchasing homes only to discover they’re underwater the moment they receive the keys to their new house.
Some may argue that fair market value is determined by what buyers are willing to pay. In a Real Estate market like Las Vegas with low inventory, and very few homes available for sale, this may seem like a good opportunity for buyers; however, current homeowners trying to short sale their homes are paying the price. The real issue which needs to be addressed is the role of our Government in the housing recovery. Fannie Mae is currently being managed by the Federal Reserve. It would seem Fannie Mae has decided NOT to help homeowners in trouble. Instead, they are profiting from your misfortune and the Government is allowing it to happen. Why would Fannie Mae approve a short sale if they can make 20 to 30 percent more profit by foreclosing?
Additionally, should the people who are currently trying to short sale their homes be punished? Many of these homeowners are facing foreclosure because they purchased the home using bad loan programs which are no longer allowed such as interest only loans and adjustable rate mortgages. While the Government has passed new rules and guidelines making the majority of these bad loans illegal, the fact remains that the Government did not have such guidelines in place several years ago and as a result, millions of homeowners across the country have lost their homes. Didn’t this administration promise to help the middle class? How are families being helped by allowing Fannie Mae to profit by throwing homeowners out on the street?
Some fear that Fannie Mae is causing market manipulation which may harm both buyers and sellers. With so many stringent new rules in place to prevent buyers from obtaining bad loans, (like they did several years ago), why is the Federal Government endorsing loan programs where a third party appraisal is not required to ensure buyers are purchasing homes at fair market value? Some experts claim that the housing market crashed several years ago not only due to bad loan programs, but because of inflated market prices. This created a housing bubble that burst with a vengeance. Are the actions of Fannie Mae and HomePath assuring a new wave of foreclosures and short sales for 2015 – 2017?
How do you choose the right person to short sell your home? Should you hire the company with the most billboards around town, or the Realtor with the most commercials on radio or TV? Wouldn’t it make more sense to choose the team who has successfully closed the most short sale transactions in Las Vegas?
A recent report named The Myers Team the #1 Short Sale Realtors in Nevada. Number one status was determined by actual short sale listings closed from January 1, 2007 through December 31, 2011. The Myers Team is nationally recognized as one of the most influential figures in real estate today. Myers Team Owners, Bill and Francoise Myers have helped hundreds of Las Vegas families avoid foreclosure. Myers said, “Sellers facing foreclosure must remember that banks are not looking out for you or your family. When you work with The Myers Team, our job is to get between you and the bank. We represent our clients, NOT the banks. It is our job to take away the stress and negotiate the best possible outcome. Ultimately, our job is to help our clients get a fresh start.”
Visit The Myers Team web site at http://www.NevadaShortSaleInfo.com
Additionally, please visit http://www.VegasShortSaleInfo.com
