Fannie Mae slipped out a press release just before the Thanksgiving Holiday announcing their new “First Look” Initiative. Under the guise of neighborhood stabilization the program gives home buyers (those who plan to live in the home themselves) and public entities the first shot at buying any Fannie Mae REO’s — investors are locked out unless Fannie does not receive an acceptable offer within the first 15 days.
On first blush, this seems positive. Afterall, owner occupied homes should in theory be better taken care of which is good for neighborhoods, and public entities are using our money to buy so why make them compete with investors.
Let’s not forget though that Fannie loans are backed with “our” money as the loans from these entities have an implicit, if not explicit, guarantee from the federal government (this point could have been argued until we took them under conservatorship in 2008 – now I think their losses are unquestionably our losses). As such, I’d think our goal should be to limit Fannie’s losses, not limit competition to help certain buyers over others.
There’s no question this program could provide some relief to folks trying to buy a home to live in. We regularly hear about home buyers losing offer after offer to all-cash investors willing to pay prices not only over asking, but above appraisal value. An incredible fact given that we have a record number of homeowners facing foreclosure, and had exploding supply a year earlier. Just keep in mind that we only have this feverish battle right now because the government has worked hard to artificially limit supply, and artificially pump demand. So I have a simple question: is the problem that the real estate market is so slow that we need to stimulate it with low interest rates and tax credits, or is the market so hot that we need to protect home buyers from competition?
What I find even harder to understand is why this “First Look” program extends to public entities. As you may recall the government launched a number of programs to buy up foreclosures in an effort to limit their impact on neighborhoods. The theory at the time was that there would be far more foreclosures then there would be traditional buyers (homeowners and investors), and that these programs would help clean up the extra supply. But that is not the way it played out.
Instead we now have these programs competing for homes at a time when there simply is not enough supply for current demand (not unusual to see 10+ offers on a clean REO in California right now). As such it makes no sense for these public entities to use taxpayer funding to buy foreclosures AT ALL right now, let alone have Fannie limit competition and take a bigger loss (using taxpayer dollars) to allow these public entities to buy them cheaper.
Bigger picture this program probably doesn’t matter much. There are so few REO’s coming to market right now, investors are already giving up on them and moving on to buy at trustee sales (foreclosure auctions). While riskier for inexperienced investors, the trustee sales are true public auctions where anyone with a check can come and compete for these homes before Fannie gets a chance to decide who does, or does not, get the “First Look”.
Another possible benefit of this program might be to limit the amount of unethical/fraudulent behavior on the part of some of these REO listing agents. How many of us have seen our higher offers overlooked in favor of inhouse purchasers who close escrow for far less than our buyers offered to pay?
I’d recommend reporting that to the lender if you ever see it – if the listing agent is not presenting an offer to a bank it is certainly an ethics violation, and it may even by felony bank fraud.
While I understand where you are coming from I personally think this program is more likely to increase this type of fraud, not decrease it. If the REO agent is really willing to not present offers in favor of in-house offers, why in the world would you think they wouldn’t present their investor offers as owner occupant deals. Or start to lock out your home buyer offers claiming your folks are really investors.
I think we have to deal with fraud by prosecuting it, not by writing up poorly thought through rules that complicate the offer process, limit competition and hurt taxpayers.
Thanks for contributing an interesting take on this.
We offered on a FNMA owned property and agent told us that FNMA will not counter on an offer that is not within 80% of list price. How can I find out if this is true. I have never heard this before and we are investors and have purchased FNMA owned properties. I think the agent may be holding out and not submitting the offer.
The only way for that to happen is if Listing Agent did not present your offer. Most Asset Mngmnt companies, as well as Fannie Mae, use a data entry system for offers. Ask the listing agent to print the offer screen for your records. (there will be some private information such as Sales Rep name and phone # that may need to be blacked out.)
And my experience with NSP buyers is that they are given concessions that would not ordinarily be available to homeowner buyers. And, the NSP buyers are simply flipping the properties for a fast profit.
In our community, the city has used NSP funds to purchase about 10-15 foreclosed homes. They have renovated the properties and donated them to the city housing authority for rentals.
This is an example of the reason why we are in this mess. The government should be encouraging investors making all cash offers in the auction. It’s a win for the government.
Once these speculators start losing money, those properties will be up again on the market at a discount.
Let the free market work.
This is proof of Obama’s goal of “economic justice” though wealth redistribution. Blatantly pushing everyone else aside in favor of those Obama wants to favor.
I wonder how long it will be before the deed restrictions on resale will be added to the mandate? Sean I agree, the banks should be trying to get the most money they can from these homes.
You can’t hope to outbid the investors they hit first look and they are priced too high – when they go off first look and reachable the investors swoop in – FHA is only helping the wealthy scoop up properties to paper, paint and re-rent – sold by a broker near you – how often do they get caught really if ever re-renting? The wealthy are out-bidding us so they can then gauge on rent and we will never be able to own…all done with our own tax dollars… – Also having problems with asset managers pulling the listings when they get low and doing in-house pocket deals with their investor pals…They are specifically manipulating the system in their favor and systematically and artificially pricing us out of what should be a rebalancing market in favor of the lower class. This is Robinhood and they are re-distributing the wealth – to themselves there is no upward mobility or bringing the wealth down – that is a blatant fallacy!! Fannie Mae is a corporate giveaway just consider it another highway project or housing complex that really benefits the builders and the residents get nothing – all done in the name of the poor – and then they have the gall to turn around and villanize the poor. And the sad thing is that rhetoric seems to be keeping us in line. Job well done!!!
one more thing about that – why are realty trusts which are corporate entities allowed to buy residential properties in the first place …? Perhaps CORPORATIONS IE REALTY TRUSTS/ PROFITEERS should not be allowed to purchase in residential non-apartment zones – that is the underlying problem in the entire housing crisis and why Fannie Mae was needed in the first place. Stop playing dirty and then the subsidies won’t arise to defend the lower class. When you seek to profit out of greed then the need arises to defend us. Just noone stopped it where it needed to be stopped at the root – which in my opinion is the ZONING!!!!!! Not to mention the exorbitant rent profiteering where rent controls are now desperately needed – Keep raising them up – and I guarantee the need will arise next for rent control and the rich will whine about that- So I guess your greed has a price now – doesn’t it? AND it absolutely should carry one why do you think they want to scoop up these properties so badly for so cheap and then charge more than a mortgage!!Sorry we didn’t just shut up and rent fat -cats!!! We needed somewhere to live.
e – in our humble opinion part of the American dream is to be able to invest some of your earnings to create an income towards a better life, and retirement. Similarly there are many that aren’t in a position to buy and need to rent. Why in the world would you suggest that we rob anyone of the opportunity to invest their hard earned money?
Also, I find your notion that greedy investors are the root cause behind rent increases to be largely laughable (with some exceptions). I think you’ll find the real robber baron to be the federal reserve and their need to continue to inflate the monetary base, slowly eroding the value of money and causing prices to rise. It’s not just rent… its healthcare, education, food, gas, etcetera and it will get worse before it gets better.
owning a home considered part of the federal housing/fannie mae project, when fall too foreclosure was refused any assistance to avoid foreclosure / drop in income medical/ owned more than one home/ short sell one home to return too prior home would consider modification/ lied too/refused modification/lockout without receiving eviction notice/ all in the name of fannie mae they have different laws for themselves. What a disappointment. Penalized for owning more than one home, senior, medical, didn’t ask for taxpayer assistance just rate reduction, owned home more than 12 yrs., normal loans/20 down all upgrades what a loss. foreclosed sold at auction federal housing to fannie mae handled by bac servicing?? what happened to countrywide/boa loan??????that was convient being forced into 3 foreclosures will lose everything that I have worked for; and no one gives a sh.
I bid on a property in September and was told my offer was not going to be considered since I was an Investor. The property closed on October 23rd for $72,000 ($3,000) less then what I bid on it. Now on December 4th it’s listed for $125,000.
What recourse do we have? If it went to someone ‘needy’ I can live with that but this makes me sick and is down right stealing.
Here is the property now
http://www.redfin.com/VA/Woodbridge/Undisclosed-address-22191/home/9152119
This is the email I recieved back from the Seller’s Agent regarding my offer in Sept.
“Hello,
Concerning on offer on this property. Please note that Fannie Mae instituted a policy in August, ’09 that they will only consider offers from Owner Occupants in the first 15 days of a listing. They do not accept any Investor offer submissions during this period and ask that I just hold on to them until after the 15 day period has elapsed in case an Owner Occupant offer is not accepted.
I am sorry for the inconvenience. They also have asked me not to formally post this info in either the listing remark or on my web site.:
I’d have a couple of questions if I were you.
1. Who is the new owner? If it is a public agency, then reselling is fair game under this program.
2. Was this home really part of this program? Note my reply to Tracy above. I think this program is ripe for abuse as it gives agent a free pass to not submit offers. I expect we will have a few bad apples that use this as an excuse to give deals to their friends, whether or not the properties are in the program.
I’d report it to Fannie Mae, and my local U.S. congressman and senator. If the selling agent mis-used the program they should be prosecuted, and even if everything is legit our lawmakers need to know that this isn’t a good use of taxpayer funds.
Here is the info I’ve been able to gather on the property. It doesn’t appear that it was sold to a public agency, the purchaser’s name is Alicia Martini. She paid for the property in cash! Not against the law of course but that seems fishy for a first time homebuyer to do that and then live in the property. Perhaps she is trying to get the first time home-buyer’s tax credit too.
I’ve emailed Fannie Mae and plan on calling the listing agent to see if he is willing to provide any detail before I contact the selling agent. Also since this property is currently for sale I plan on going to see it as well to see what work has been done.
[THE FOLLOWING HAS BEEN EDITED TO REMOVE CONTACT INFO AND PROPRIETARY MLS DATA - ADMIN]
LISTING AGENT/BROKER
Listing Agent: Paul Moravek, Avery-Hess, REALTORS
List Date: 09-Sep-2009 Orig List Price: $67,500
SOLD INFORMATION
Selling/Rental Agent ID: Dewayne Soltes Jr., Century 21 New Millennium
Close Date: 23-Oct-2009 Close Price: $72,000
The houses has now been pulled off of MLS after I spoke to the Selling Agent, who claimed he had no idea. Fannie Mae will call me back in 4 business days at which point this will go no where.
Oh well I tried.
Here’s one for you: My husband and I bid on a house, bidding almost $30,000 over list. FNMA through us in the trash because we were using VA. In an effort to help us, their agent suggested we go through Homepath, which we did. Oh, too bad, so sad… they counter offered with the other potential buyer… we got our Congressman involved and eventually the lawyer for FNMA. They pulled the listing because there was evidence that we were discriminated against. They then claimed we offered the same amount as the other buyer… why the counter offer then? Are they hiding the paper trail? This does not end happily: They raised the price of the property, put it back on the market, we bid even more than before using Homepath, and guess what? No deal. FNMA is corrupt from top to bottom and frankly, they can shove it.
I wanted to provide follow up to my last post.
There is zero oversight for this program, zero enforcement and zero accountability. You should have an intent to be an owner occupant, however if you can sell it at anytime and there is no verification that you don’t currently own a property or ever intend to be an owner occupant.
If you sell with in the first 90 days it should only be sold for 120% of the value property. However after 90 days you can sell it for any amount. But again there is no oversight/enforcement on the program so it shouldn’t matter if you sell it within the first 90 days for what ever you want.
The Fannie Mae level two agent Carlos said I found the ‘loop hole’ in the program.
I will finish writing my congressman and will have to decide the next time I’m faced with this situation whether I check ‘owner occupied’ and make a quick 50k or check investor, loose the property, help support the bailed out company (Fannie) and allow some other ‘deserving’ citizen who is willing to see that this program is a farce and has no teeth.
If it was truly an owner occupant, they are not allowed to sell for one year (at the time of mypost). In December of ’09 I dont know what the time period was.
Again, if you feel that the listing agent may not be presenting your offer, ask for a print out of the offer screen. (I have found however, that it is not always the listing agent that is the problem. Fannie Mae can be its own worst enemy when they don’t adhere to there own programs.
Here is a deal that seem fishy to me. Would appreciate any info or guidance on what recourse I may have. A house in California is listed at $350 Thousand. The listing agent calls my agent and says that the current offer on the house is having problems and she is concerned that it may fall out of escrow. She finds it odd that the buyer used his uncle (an appraiser) who is in the same office as the loan writer, to submit an appraisal of $300 Thousand. The BPO from the bank (according to the listing agent) was $330 Thousand.
I was then told that selling bank ACCEPTED the $300 Thousand appraisal – which CLEARLY is way under value – and that the buyer suddenly changed lenders so the deal would go through. This was a short sale.
We made an offer the same day the selling Realtor told us of the accepted offer of $300 Th. for $330 Th. with 20 percent down and removing the contingency should any appraisal fall short of the $330 , I would make up the difference in cash.
We were told by the selling agent that the deal is done, and the $350 buyer would get the house for $300 Th.
Something is wrong here . . . .
I really want the house and feel the buyer somehow strong armed the selling bank, or possibly cut the deal by moving their buying loan to the selling bank . . . I can’t quite figure it out.
Suggestions are greatly appreciated. Thanks.
Key statement to me is that you submitted the offer the same day the $300k was “accepted”. If it was accepted there isn’t anything the seller can do they’ve made a contractual commitment to sell. I suppose if they thought they were defrauded in the appraisal they could get out of it, but I’d probably just move on.
I made a full ask all cash offer on a Fannie Mae home recently (as an owner occupant). My agent got a statement from the listing broker stating that there were multiple bids and I had to put in my best and final offer by 3/12.
The listing was posted on the MLS on 3/03, so the last day for “first look” bidders was 3/18.
The listing is still up as “active”.
A) Why did I have to put in my best and final 1 week before the 15 day period ended?
B) How long will it take for me to get a response?
(I’m kicking myself now, because I realize that I could have bid higher as an appraisal will probably not come in higher than the asking price! – Nice loophole that!)
Owner occupied purchasers are allowed to purchase as long as the property has been on MLS for 3 days. First Look doesn’t provide that the property won’t be sold for 16 days, only that an investor’s offer won’t be considered until the property is on MLS for that time period.
When there are multiple offers, the procedure is to ask all of the bidders to submit their highest and best offer. The asset manager responds shortly thereafter.
Lately, asset managers are countering out the appraisal contingency when the offering price is higher than the list price.
today I was told by my realtor that the Fannie May owned property that was on the market for three days when I made my offer was pulled from the MLS on the fourth day and put into an investor portfolio. I thought owner occupants were given the opportunity to bid the first 15 days. I really want to buy this house. I have 5 children and my house burned down. I have the cash to buy the house from the insurance but don’t even know how to do it. This hardly seems fair.
It sounds like it was pulled for a pool sale. Pool Sales are used to liquidate a large quantity of assets at once to a large investment firm. Generally, these investors will be bidding on anywhere from 100 to 1000 homes for one price. Shortly after, though, the investor is looking for Realtors to list for them. You may see it come back on the market.
Same sore situation just happened to me in Pigeon Forge, TN. I chose to be honest and acknowledge “investor” when submitting my offer and patiently waiting my 15 days and have now been notified by the agent that another “owner occupant” offer has been accepted.
Come on….this was for a 1-bed/1-bath condo in a highly desirable resort/spa vacation facility, Riverstone.
I have since tried to contact the listing agent, Jeff Schoenfield, thinking he would have more information about this situation. Interestingly, he has not returned my call. By the way, his resume claims he is “top selling agent” in the area for years.
Fact is…price was such a good deal and instant equity was a given that it seems fraud stepped in….
Now, how do I report this fraud…..or does our government even care?
Quite frankly, I see little that you can do. Maybe vote for the Tea Party candidate, write your congressman (must sign affidavit), call Fannie Mae (expect to call then recieve a return call 4 business days later, repeat if you miss their call from ‘Level 2′) or you can join the shared by stating you intend to occupy then changing your mind the day after you close.
It’s shameful that conartists and crooks are given such any easy way to cheat the system.
It
If the asset manager is willing to take a loss on the property, and he thinks it’s a good deal – they put it out to bank employees and pull it from the market – they don’t even have to meet your offer (or they can outbid you by a dollar) – the problem here is this program was set up to help first time buyers young adults etc, but none of us can compete with investors or bank asset managers to actually purchase the properties….it seems unfair that corporations and realty trust owners are allowed to compete on residential properties…especially single family homes and condos…one can see apartment buildings….but we have separate zoning for a reason…in example -if a large company like walmart goes into home ownership how can anyone actually ever win on bid ?????? Is my generation destined to rent homes from corporations and wealthy investors – or can we have back the American dream please? FHA doesn’t give you the ability to outbid investors – so goodluck winning a bid with your little Fannie Mae loan on that nicely priced property – either the bank employees buy it (some fat cat at the table reviewing your offer) or a wealthy investor who wants to rent it for a ridiculous amount each month…..seems anti-American to me. More like Robin Hood.
My husband and I bid on a property. The bank then asked for our highest and best bid. It was accepted. It was no secrete that we were not residing on the property. The house is for our daughter, her husband and their 3 children. This process has been going on since May. Last week, we signed the escrow papers, wired the $28,000.00 down payment. Escrow should close at any time. Today, were were told that because we are not owner-occupied and the property was not listed for 14-15 days, we can no longer purchase the propery. If we had been told this information in the beginning, we would have simply looked for another property. Do we have any recourse?
If your daughter was buying the property and it was deeded in her name…would it be owner occupied???
she buying …but your paying for it…
To be an owner occupant, it must be there primary residence, and the owner occupant must be on the offer, the deed, and the loan, if any.
In the Fannie Mae Selling Guide, page 229, it defines the different buyer types. You can purchase a home for an adult child if they are disabled, or unable to work and buy the home themselves. We are trying to do this for my adult son who is disabled. However, even though they accepted our offer (over many others), they are telling us NOW that it only counts for the FINANCING of the property… not the ability to bid on it before the “First Look” period is up. ??? Now we’ve been waiting for two weeks for them to sign the purchase agreement and they drop this on us! We could have been looking elsewhere and they don’t seem to care.
I’d escalate the issue beyond the agent or broker that is telling you that. Start here: Homepath_Online_Offers@fanniemae.com or their resource line: 1-800-732-6643. You might even try your congressman.
I spoke to the person at Fannie who designed this program – he’s in total denial as to what a total failure, and waste of tax money it is (I wasn’t quite that harsh in person, but now wish I had been). Until they start to hear from folks like you and the many others in this thread and beyond that this program has harmed there is little chance anything will change.
Since I posted this, Fannie Mae has asked the listing agent to go back to all offers and ask for their “best and final offers” AGAIN!! We already did this once and they VERBALLY accepted our offer on June 5th! We had the home inpection done 5 days after their verbal acceptance (on pg 6 of Fannie Mae Buying Guide the 10 day home inspection clock starts on “the date Fannie Mae VERBALLY accepts your offer”) which cost us about $400. The REAL kicker is that now they are accepting INVESTOR offers as well! WTF!? Our loan has already been approved based on the verbal acceptance and all they need is a signed purchase agreement! We upped our offer AGAIN, but I’m sure we won’t be able to compete against the investors. THIS SUCKS!
P.S.
I also sent all the info to our Congressman, John Kline. They are trying to get a contact to speak to in Fannie Mae but it is even difficult for them! Our offer is now a few thousand dollars over the asking price and we are not asking for any of the 3.5% closing cost “incentive” that Fannie Mae touts!
We bid on an auctioned home for 75K in Sept/2010 – we would have been owner-occupied. It went for 77K to Fannie Mae….who is now reselling it for 105K. Are they in the business of flipping homes now?
What kind of auction? Public? Sheriff’s Sale?
Submitted $100 over full price cash offer at same time as a full price finance bid came in. I intend to live there & signed such in the affidavit of owner occupancy. Rejected as investor by Asset Management co. saying I am an investor, because I own the house I live in and own 1 rental house.
What are the rules? I can’t get a response from FNMA through their homepath phone, or leaving a message. The listing broker says he has done over 30 of these & submitted my bid and was surprised as I was. How can one learn the rules?
Are their any rules? Why sign an affidavit at all if it will just be ignored?
And that lower offer they took instead comes at taxpayer expense.
More info on HomePath’s “First Look” program here: http://www.fanniemae.com/homepath/incentive/index.jhtml#first-look
Oh no! Taxpayers paid $100 so that a neighborhood could be filled with owner-occupants instead of renters.
Sounds like a great use of tax money to me.
But it’s kind of ridiculous to think that this program will change the number of owner occupant buyers, or the number of homes sold to owner occupants. Anyway you cut it we are going to go from 69% homeownership to 55-57%. The only way to change that would be to allow those that are losing their homes in short sales and foreclosure to buy again… and so far Fannie and other lenders aren’t willing to do that (can’t blame them, as otherwise millions of underwater homeowners who still are making their payment would stop if they could get that deal, accelerating the losses these lenders will ultimately take regardless).
As such the ONLY thing “First Look” clearly accomplishes is losing taxpayer money in my opinion.
I’ve been monitoring this type of situation here in SW Fla where the foreclosures are one of the highest – and it appears to be SCAM related to the Realtors here….but not sure there’s anything anyone can do.
The trend is that the Listing Agent of a given house most often gets the sale – getting higher commissions – even if the price is slightly lower….preventing a split with another Agent. Higher offers are getting ‘lost’ and these Listing Agents have a bevy of their own investors they’d rather deal with directly.
Some experts are now saying to go the extra step and identify who the Listing Agent is for the FirstPath home and submit the offer through them – you’ve got a much higher chance of success.
Yes, we’d quickly come to the conclusion we made a major blunder by not getting direct with the listing agent. Live & learn, this was 1st try at buying these & we really wanted to make this property our home which makes matters worse.
Is there no recourse to get the bids from Asset manager as submitted or encourage the listing agent not to “lose” your bid? Oh well, goodbye to this one.
Question…
I made an offer on home and agreed to finance using the HomePath program – my offer was accepted. As the loan process continued, it was discovered that I wasn’t able to get the automated credit approval that my lender had anticipated. However, FHA financing was not a problem, and offered a better payment. I thought all was good, but the asset manager has indicated that I need to sign an addedum indicating that I guarantee to pay the difference if the appraisal comes in low. In addition, the asset manager wants to see addition funds in my bank account to cover such a cost.
I have to be honest, this seems completely unethical, and borderline illegal. Is is Fannie Mae’s intention to sell homes for more that they’re worth? Not having to get an appraisal is great, but is it being abused to overprice and sell homes?
Is there anything I can rightfully do here, or do I just have to walk away? I’m to the point where I want to contact Fannie Mae, FHA, an attorney.. This just seems wrong.
Any input would be much appreciated. Thank you!!
That seems at odds with their whole “First Look” initiative which seems more aimed at giving home buyers a good deal, then maximizing sales price.
Outside of whatever rules Fannie may have, I think it depends on how your offer was written. If your offer was specific about financing terms and you no longer meet those terms then there is likely little you can do as you are the one that failed to meet the terms of the offer. If on the other hand your FHA financing is within the original accepted offer then they can not demand anything. When ever submitting offers I personally like to be as vague as I can get away with so that I have flexibility without having to ask for seller approval of a change.
As for contacting Fannie Mae the following email address should work: Homepath_Online_Offers@fanniemae.com.
Thank for your response. My offer did indicate that I’d use the HomePath program, and my intention was to do so. That being the case, I have changed the terms of the contract. However, that still doesn’t seem to be a reason to add conditions that are only aimed to make sure that Fannie Mae gets the offer price. In all likeliness, the value will be fine, but I still don’t feel comfortable signing my name on an addemdum that indicates I’ll cover any differance. It seems Fannie Mae is taking advantage of the system. I also really don’t know how binding the addendum would be – I mean what if i just decided to walk away?
Deciding to walk away could mean a loss of your deposit, or worse. Those terms should be spelled out in your offer (purchase agreement). You should check them.
Fannie Mae is flipping houses. We put an offer in on a grow house Fannie ended up with. House sold in 2007 for $280,000 then again in 2007 for $407,000. It was a brand new home never lived in. Purchased as a grow house. The appliances were still had plastic on them.
According to the listing agent Fannie Mae invested $15,000 rehabbing the house. The so called “contractor” did a horrible job the new high end bath fixtures are all scratched and there is paint drips and overspray everywhere, and the patch work stands out like a bull in a china shop.
Their asking price was $183,000 we offered 155,000 cash and closing in 2 weeks. Fannie came back at 181,000. Yea have fun with that one sitting awhile and getting stripped once again.
We are also looking for some investement homes to use as rentals and it seems like most of the forclosures are owned by Fannie Mae and even if you are paying cash they require an occupancy agreement. How the heck would such a worthless piece of paper ever stand up in court? If I pay cash what is it of their business what I do with it?
The realtor also told me that Fannie is trying to drive up the home prices in my area (SW Florida). Oh that is nice since they are also to blame for why the housing market is a mess.
I’m also in SW Fla – and somewhat surprised the listing agent even presented your offer. We had a FMae house on our street where an investor offered 75K (3bd/2ba/pool) whose offer was declined – then 2 mos later found it was sold for 66K to another investor the listing agent knew….thus double commissions. After the fact, it’s hard to prove whether the first offer was even presented.
I’m finding that to get these properties for rental purposes, one needs to identify who the listing agent is first – and only deal with them. Some investors (esp in Cape Coral) are even following up with FMae to make sure the offer was presented to them.
I also tend to agree with you that FMae is holding the line on a lot of their porperties to (try) and raise prices – but with the glut of homes here, it’s going to be a long wait.
We are also purchasing our primary residence which that one would have been. We also did try and deal with the agent directly but she is a total bone head arguing with me on the phone on why Fannie Mae has the homes priced where they are to raise the home prices in our area. I could care less as in my educated opinion the house was only worth $155,000 tops as all the work done needed re-done correctly. They purposly only showed the public record of it selling for $407,000 instead of the $280,000 in 07.
It was purchaed because it was in a very nice area and no one suspected they were using it as a very successful grow house.
She claimed she was trying to “educate” me. I sent her all the links to the public records and newspaper articles to educate her on why I wanted to offer $155,000.
It has been stripped once as the fingerprinting dust was all over the house and they bone heads just painted over it very poorly. So as it sits it will get raped and pillaged yet again and they will get less than $155,000 for sure.
The front doors do not even match one is an elegant red w/ leaded glass and the other is a white patio door (as the police broke the window out to gain access to the house when they discovered the 700 pot plants inside.
This boggles my mind that they are trying to get top dollar in this market. I will be very shocked if the get a higher offer than ours.
We also offered $125,000 cash close in 2 weeks on a private sellers empty house. He was drunk and rude to the listing agent wanting more money. The back window was broken out he fixed it but now the garage window is broken.
Now he has it rented out to a rubby that has trash, cig butts all over the yard, a cat and a mess of kids. They had just moved in the day we put in the offer and it was already on a downward slide. The listing agent dropped his listing after his refusal of our offer.
The sellers need to realize that when a buyer comes along especially with cash they should jump ship. Most that have held over the past year have ended up dropping $20K – $50K in price.
We have been looking for a year now for a great deal and finally have an accepted offer on a short sale.
Fannie and Freddy should be taking whatever they can get to get the overload of houses off their books. They should not be investing money in repairing them IMO it should be left to the buyers. Especially with the shoddy work they are having done.
Yes I have a feeling the listing agent did not submit our offer. How would one find that information out?
The realtor we are using now has been great and I know she has submitted all our offers.
LA – I went through this same thing when we bought our house, primary residence, a year ago. We had done our research, and made a more-than-reasonable offer. The listing agent told our agent that they had ‘multiple’ offers, and we weren’t even close. Believing this (dummy me), I upped the offer closer to the asking price. After the 3-day period, no answer. Now I’m irritated.
I then went to the Lee Co (SW Fla) property site and identified the current owner/investor……and called him directly. Left a msg that his agent had a valid offer in from us – and also related the previous offer, multiple offer response, etc. Within a day, my agent got a call that my latest offer was accepted. As a backup, I had also called the owner of the listing agent company (in my case it was Century 21) to complain of poor service.
Since then (while investigating other potential properties), I’ve come to the conclusion these listing agents are tied into their own ‘group’ of investors – and purposely hold off potential buyers until the price drops where they get both the listing and sales commissions. I’m definitely seeing a trend of this with the FMae 21-day public view period.
Since then – with any properties I’m homing in on – I do the due diligence and identify who the listing agent is…and deal with them directly. I’ve always believed the loan officers were the worst scammers – but this market has taken the con artists to new heights now.
You’ve entered the Twilight Zone – there’s no way you can know whether the offer was submitted or not….and the listing agent can come up with all kinds of excuses.
In my case, it was an off-hand remark my agent said (they prob didn’t submit it) that prompted me to identify and call the owner directly (who was an investor wanting to dump the property).
Legally, the owner has 3 days to accept/decline – but if the owner isn’t aware of any offer….the listing agent can just come back with a decline until he gets his own buyer.
Two other tips (SW Fla): Check and watch your homeowners insurance costs….and be aware if you’re going to rent for less than 6 mos they’re going to start enforcing the 10% tax.
Happy hunting.
Ask the listing agent to print the offer screen for you.
Dataport: Thanks for the tip. We will be renting our current temporary home out as soon as we close on our primary residence. We have rentals in Kansas there is no rental tax. Are you ok if you make them sign a 1 year or 6 month lease?
We do strictly month to month back there but have residents that have lived in the building for 10+ years. Mainly because any document there is not worth the paper it is written on. Judge was a waitress before becoming judge. Total kangaroo court. lol
Thanks again,
My husband and I drove by a FMae home recently to take a look.. it is everything we have been looking a year for. It is a foreclosure…. Contacted our Realtor and told him to contact the Listing agent to put in an offer. That was 4 days ago… since that initial call to the listing agent he has been telling us all the reasons we don’t want this house … “It was tagged by the city for environmental issues” (called city.. no such tag)… it has no electricity and is completely unlivable (door was open when we did our drive by.. we seen inside and is in great condition for a foreclosure and electricity is on) Told us we had to have a Cash Offer (called Fannie Mae and they confirmed it was a HomePath property ok’d for the 3203K mortgage)… My agent flat out told him we were putting in an offer today… he says “who’s their mortgage broker, I want to talk to them” like he wants to talk them out of financing the property! Now.. the clock is ticking and theirs 9 more days on the first look program. We are offering the asking price… but how do we MAKE this guy put in our offer???? I feel totally lost… I hate that this guy has our future in his hands!
Start with calling the office Managing Broker/Owner, then your state’s Real Estate Commission. In most states they are required to present any written offers. If this doesn’t work, Fannie Mae has a 1-800 number that goes directly to their Washington DC office. This call will trickle down to that listing agent within 24 hrs.
We went through the same thing…the Listing agent most likely has an investor on the hook and doesn’t want to split the commissions with (your) agent.
We had to search property rolls and identify the owner – called them and said we had placed an offer, but no response from his agent….got it accepted the next day.
Legally, you’re supposed to get a formal accept/reject letter in 3 days – but there’s no way to (legally) prove it was never submitted….all kinds of excuses/reasons they can come up with.
If the List agent is part of a major group (e.g. Century21), call their main office and complain – they’re the ones worried about possible lawsuits.
Well, the listing agent got what he wanted, he talked to my mortgage broker long enough to find out that the one and only mortgage that my broker can’t do is the Homepath construction loan mortgage (not sure if i got the name of that program right) and guess what….. he called my realtor and told him that he WILL NOT put in my offer with out a primary residence certification (which my realtor has requested NUMEROUS) times from him, i called fannie mae and was told that i should get that from the listing agent! And last but not least he wants a new pre-approval with a loan going through the construction loan he KNOWS my mortgage company will not do. He also sent my mortgage person a list of photos to show her why the house cannot be mortgaged. The problem is that he has taken a bunch of pictures of the out buildings, sheds and the basement and told her it was the house! Luckily I had already warned her and she ignored them. She forwarded me the photos so that if I do end up talking to someone from Fanne Mae about this property I can present them as “evidence” to unfair practices. We’ll see what happens… after the weekend and the Monday holiday we will have 5 days left of the First Look program. I am praying for a miracle at this point!
Melissa,
Your realtor should have access to the occupancy document. I have one from an offer we did not put in on a house in digital format. We wanted to buy it for a rental so we just did not put in the offer after they said we had to agree to live in it for a year or face a 10,000.00 fine.
Total BS
Not sure how to give contact info w/o giving it to everyone I could email you the form it is only one page.
Lee
They just dropped the price on the one we did want for our primary residence 10,000 after they only dropped it 2,000 when we put in our offer. I guess it will go under $150,000 and we can put another offer in on it. lol
Again Fannie and the rest of the banks caused this mess and they are still trying to make out like bandits when the government is giving them back 80% of the losses anyway.
The longer they sit the more they are damaged and items stolen from them and the banks loose more.
Lee
This is the document you are needing. It just has their homesteps on left and Fannie Mae on the right (hint on their site so if you are handy w/ Word you can make it yourself)
AFFIDAVIT OF OWNER-OCCUPANCY
In addition to the representations in section 21 of Addendum #1 of the Contract of Sale dated
______________, 20____, between the Federal Home Loan Mortgage Corporation (Seller,
sometimes described as Freddie Mac or HomeSteps) and Purchaser and any and all other
contractual documents, for the property located at
_______________________________________________ (“Property”), I certify, agree,
represent and acknowledge that:
1. All of the information provided in this Affidavit of Owner-Occupancy and any
supporting documents requested by Seller and provided to Seller by me are truthful and
accurate.
2. I understand that Seller will rely upon the information provided by me in determining
whether to complete that sale of the Property to me.
3. I will occupy, establish and use the Property as my primary residence within 60 days after
closing and I will continue to occupy the Property as my primary residence for at least
one year after the first date of occupancy.
4. I agree and understand that any misstatement or misrepresentation in this Affidavit of
Owner-Occupancy will constitute a breach by me of the Contract of Sale, and will permit
Seller the right to cancel the Contract of Sale and to exercise any remedies available
under the Contract of Sale and applicable law.
5. I understand that any misstatement or misrepresentation in this Affidavit of Owner-
Occupancy may subject me to criminal and/or civil liability.
_______________________________________ ______________________
Purchaser Signature Date
_______________________________________ ______________________
Purchaser Signature Date
Statement of Selling Agent
Selling Agent agrees and represents that to the best of Selling Agent’s knowledge the Purchaser
intends to occupy the Property after closing as Purchaser’s primary residence. Selling Agent
acknowledges that Seller is relying on this representation.
________________________________________ ______________________
Selling Agent Date
Thanks so much for that LA.. I will do my best to use that info to get the doc I need, but in the mean time if he is adamant that the offer must include mortgage terms my broker doesn’t offer he won’t send it anyways. Hopefully in the end he doesn’t get away with it… There is no broker to call to report him as he has bought a franchise from a Realtor Co. and he is a one man show as well.
Melissa – I have spoken with FannieMae, and they are already working with the broker in question to resolve the issue. Someone from FannieMae will likely also be reaching out to speak to you as I provided them with your contact info. Your offer will definitely get a fair hearing. Best of luck in your purchase.
Sean,
Thanks for the stones! Even if the bank doesn’t except my offer, I feel great knowing that I got fair shot. Many thanks to you from my husband, myself, and my two little boys! If this becomes our home you will have had a big part in getting us there!
I cannot thank you enough. Yesterday I felt like I was facing Goliath without a stone in site!
Thanks again,
Melissa
Please let us know the outcome. And be sure to thank my friend at Fannie Mae if she calls – she’s really the one that went out of her way to help.
Folks – on these Fannie / Freddie deals definitely don’t be afraid to try to get help directly from them if you think the broker is not playing honest and fair. The majority of REO brokers that handle these deals are top notch, and the best way to get rid of the few bad apples is to call them out.
They can be the worst. Sold a house w/century 21 owner got screwed out of 80K.
You can try a hard money lender. Just search for one in your area. Private loan no bank. We found a house before our money was availible and we were going to go that route just to get the good deal on the house. Prices dropped again so we are still playing around looking for the best deal we can get for our money.
Good Luck
I have seen a trend that is distrubing putting agents listing Fannie Mae properties at legal and ethical risk. In addition I believe Fannie Mae is patently instructing assest managers and listing agents to engage in and promote dishonest behavor.
When buyers hire certified experts to inspect properties and the buyers turn those inspections over to the listing agents the inspections don’t make there way back to the assets manager. In addition, listing agents are instructed not to keep these document not to disclose this information to any future escrows on the subject property.
At the very least the listing agents have an obligation as does Fannie Mae to disclose this information. This pattened and flagerent Violation of real estate laws Is concerning. Is anyone else seeing this? Am I miss understanding discloser laws?
I’m not a legal expert on this, but I certainly understand why a seller may not want to review a buyers inspections, as I believe you’re right that it could create disclosure issues. Keep in mind that buyers inspections are for the buyer – NOT – the seller.
The problem for the seller, and I’ve been in this position, is that not all buyers are ethical. I once had a buyer declare there were all kinds of issues with a property and that he’d need a large discount to close. I knew his inspections were completely bogus – they were even performed by his relative. I told the buyer to take a hike. He then tried to force me to disclose the issues to future buyers. It was simply extortion, an effort to try and make me sell him the property at a discount. In the end I knew he would contact whoever bought the property, so I did disclose the issues. That was the last time I ever looked at a buyers inspections.
Reply is a few posts below, oops
I try and do as much research as possible on properties we are interested in. One I saw 2 lawsuits from the owner and Citizens insurance. I kept digging even though there was no record for repairs for permitting I uncovered that it was a repaired sink hole property. Agent denied until I sent over all the paperwork I had to prove it. I got to speak to the company that did 1/2 the repair work the owner pocketed the rest of the money and ran back to England.
Was this an REO or Fannie Mae deal?
Understood! Discloser is always best then the buyer can determine things for themselves. I fix and resell houses and know if acted as Fannie Mae is doing, I would be sued if a buyer found out a questionable
report was produced and i claimed i did not look at it. And since I am agent i would be presumed guilty having taken advantage of the buyer.
There is a big difference btw using ones relatives to create doubt then using know licensed professionals together a better understanding of the asset. Fannie Mae’s behavior in my opinion is highly suspect. I have always been told when in doubt disclose!
It was a Chase forclosure. FM did not get their greedy hands on it. It was listed for 76,000 (345,000 house on 5 acres) then all the sudden there were supposidly tons of offers on it. We picked 101,000 cash waived inspections as our “highest and best” and got outbid by 1,000. Total BS…..
I have been following the posts on Sean’s blog with great interest. I know that everyone wants to be polite and try to see the good in others, but after decades of dealing with realtors, loan brokers and lenders, (and now appraisers), the only person looking out for my interest is me. I like to say that they are either incompetent or dishonest, because those are the only two possible explanations for their behavior.
The real problem is with the lack of professional ethics. These guys all get commissions. No sale, no commission. It has been my experience that if they are faced with loosing their commission or throwing the client under the bus, the client’s interests are sacrificed.
OK, I do have a great realtor now. He is experienced, professional and ethical.
In 2009 my wife and I decided to buy some rentals. The experience was so frustrating, everything being written on this blog, we experienced. We made all cash offers for over list price and told they had too may offers, so ours was not even submitted, etc, etc.
It was this experience that sent me to the foreclosure auction. Of course all of the realtors told me that buying at the auction was too risky, I would certainly loose my shirt. Of course they are correct, it is very risky and not for everyone, but we did not loose our shirt and we now own five rentals and we have flipped eight houses. All previously foreclosures.
It is unfortunate that the real estate community will not self police and get these crooks out of the business. I can see by the posts that many people will give up and just not buy a new home or an investment property.
The sad truth is that there will be an abundant number of great deals for the next 3 to 5 years, maybe longer. There are plenty to go around, and, we need to help anyone willing to become the new owners of the foreclosures. Otherwise, prices will continue to decline and there will be even more foreclosures.
Buyer beware, the system is rigged against the little guy. As with most of our markets, real estate is an insiders’. If you think your realtor or the bank’s realtor is incompetent or dishonest, find a new realtor and/or call the seller. The bank will probably never contact you, but enough of these calls or emails will eventually get someone’s attention.
Many of the posters here seem to be knowledgeable on this subject so maybe you can answer my questions. A home came up for sale near me. I found the listing myself without the help of a Realtor and called the listing agent. The agent asked me if I was an investor and I said I would be living in the house but had a rent house in another city. She said I would be considered an investor if my name was on the title of any other house and I couldn’t bid for 15 days. She also said this was a very popular listing and she would schedule a showing for many interested parties at the same time and would call me when she decided when that would be.
My main questions are these:
1. My wife is not on the title of the rent house. So can we put in a bid on that house under her name only as an owner occupant or does the fact that her husband is on the deed of another house negate her as well.
2. How long is the agreement that you will occupy the house; it looked like it was 1 year from some previous posts.
3. The listing agent briefly mentioned that a lien would be placed on the house. Is that the $10,000 fine someone mentioned if you don’t occupy the house for the agreed upon time period.
Any info would be greatly appreciated.
If you actually ocupy the new house for a year then don’t worry about the rest.
Thanks for the info. I would be living there for at least 1 year most likely longer so I don’t need to worry about that, but as I understand it I can’t put an offer on the house for 15 days if I am on the deed to another house. Is that correct? In order to get an offer in before it opens up to investors can my wife and I do it under her name only since she isn’t on any other deeds. Or can I put an offer in before 15 day’s if I sign the agreement that I will live there. Or do I just have to wait until the 15 day period is over.
You do not need to wait the 15 days as you are not buying for investment! If the 15 day lock out was for first time home buyers, then you would be locked out, but it’s to lock out investors, not people who plan to occupy.
Thank you again for the useful info and patience with me. That is not what the real estate agent told me at all. She told me that I would be seen as an investor if I owned another property and would have to wait 15 days. Hopefully I can convince her to check the rules again.
Go ahead and put in your offer, you will have to sign a certificate of occupancy but if you will occupy the house as your primary residence for the first year then you CAN offer in the first 15 days. I just had my offer accepted on a first look program and our first home is a rental. Put your offer in, if you have a problem with the listing agent putting in your offer call Fannie Mae directly for assistance.
Thank you Peter and Kayla for the advice. I pressed on and got her to show the house. It ended up being a bad deal. The house had bad foundation issues and floods according to neighbors and evidence seen at the property but the Realtor said there was no record of flooding. I knew the house would need some work but the asking price was high for just these 2 issues not to mention the rest of the cosmetic fixes needed. Oh well they can’t all be diamonds in the ruff. Thank you both again for your advice.
Were was the property? I buy problem properties in contra costa and Alameda counties. We don’t pay top dollar but we buy all cash, fix and flip. The bigger the issues the better.
The house is in Houston, TX. A little ways from those counties. If you are interested I could post a link. It could be a good deal if (as always) you could get it for the right price.
We found our dream house, which is still in the First Look time period. We made our “Highest and Best” offer after another offer was received by the agent. We offered a couple of thousand more than the asking price, because we love the house so much. We have 3 rentals, and now the agent is telling us that the FNMA asset manager doesn’t believe we’re going to owner-occupy, even though we signed the form and sent an additional letter giving all the reasons we love th ehouse. Is there anything we can do? I feel like crying because we’ve looked so long for the perfect house to retire in. Thanks for your help. Kristy
Call the Fannie Mae Resource number, 1-800-732-6643. I believe it goes to there D.C. office. Let them know your situation. You will need address, and REO ID # if possible. Usually they will take care of any problems within 24 – 48 hrs. Sometimes they will make sure you offer gets resubmitted and they may counter offer with specific verbage in contract to allow occupant verifications. Every situation is case by case.
I called Fannie Mae. The agent said if you have any rental property, you’re considered an investor, and they won’t believe you’re going to be an owner-occupant. I just found out that they’re selling our dream home to somebody who offered less than we did. We could have had the house if we didn’t have rental property. Years ago, we decided to diversify our money and buy rentals. Now we’ve lost our dream home. I really can’t believe it.
Conceptually the idea of helping people become homeowners seems good. Unfortunately, I hear far more stories like yours, or worse, than positive ones about this program. Not only did you lose, but taxpayers lost as well.
A foreclosed, First Look home came up near me. I contacted the listing agent on the 5th day of the listing. He told me I could not submit an offer. He had an offer and it was a done deal. He even took up the sign. Can he do this?
At the time I did not know what a First Look home was. After researching and contacting a buying agent. My buying agent said the listing agent is supposed to continue to take offers and he would HAVE to take my offer. So we went to look at the house. My buying agent called the listing agent because the key codes had been changed. After getting resistance, the listing agent gave my buying agent the key codes on the phone. Then, 5 minutes later, the person who had made the offer (found out later because the guy gave told my agent his name) the listing agent described as a “done deal” show up in the house with another thuggish young man and tried to run us off the property! Crazy.
This was in Georgia. Contacted Freddie Mac as this was a Home Steps First Look home and told them all of the above. My offer came in later than the first, and, surprise…only other offer (listing agent was telling anyone and everyone it was sold) because of the actions of the listing agent, but I was able to basically force it on the guy, with the earnest money and signed affidavit of owner occupancy.
A Freddie Mac manager whom my case was elevated to told me the other “done deal” offer did not even include the signed affidavit. I asked them why they would even consider an offer because, based on the preponderance of evidence and downright shady stuff, couldn’t they smell a rat? And guess what? The next day, when the asset manager informed the listing agent that the “done deal” offer had not submitted the signed affidavit of owner occupancy…they submitted it! I asked the manager to see if they had backdated it but never got a response on that one.
So, what’s fair? You’ve got a corrupt listing agent who, according to GA realtor board committed several violations and a shady deal. Throw out all the offers and hire a new listing agent and start over, right? Or maybe sell the property to the family that submitted all their paper work and followed the rules, right? Nope. They sold the placed to the “done deal” offer.
Well, I just got the deed info. today. They did an in-family deed transfer the same day they sold it. I know they are supposed to not sell it for a year. But can they give it or do any type of deed transfer?
Not only did they do the crooked deal, but now I know what they paid…it was $5,000 less than my offer! Our tax dollars were used to bailed out these properties so Freddie Mac could make crooked deals that don’t even follow their own rules AND sell for less money than honest families following the rules!
And when I first spoke to the listing agent, I noted the asking price on this home seemed really low (significantly less than half the county govt. appraisal and turned out to be less than half a Wells Fargo appraisal done later in March 2011) and he said, “Yep. It’s a giveaway.” Wait a second…he’s the seller’s agent…isn’t he obligated to inform his seller that the price was too low. How can he be representing the seller’s (taxpayers) best interest if he is orchestrating a sale even he describes as a “giveaway?”
Freddie Mac investigator followed up recently and assured me she has questions and “it’s not over.” But they had all this info. before and did it anyway? I don’t see what they can do now. Enforce the affidavit of occupancy that the deed transfer may have already violated? If they aren’t going to cancel an obviously problematic, dirty sale, why would they enforce the rules afterwards?
Wow. Just when I thought it couldn’t get any worse. Not only did they accept $5,000 less than the offer my wife and I made, but it was brought to my attention today, and I verified by checking our county’s online Sex Offender registry, that the new resident registered at the address of this home is a registered offender convicted of Child Molestation!
Not only did the Asset Managers of Freddie Mac approve a corrupt sale with missing documentation; non only did they cost taxpayers $5,000, they accepted less money and gave a sweetheart deal on a nice home to a child molester! Unbelievable.
On Freddie Mac’s website, it says the First Look program exists “to preserve local property values and help stabilize communities.” Judging from the reactions of our neighbors, using tax dollars to provide subsidized housing to a child molester while specifically excluding higher offers from law-abiding citizens has not “stabilized” this community or our property values. Outrageous.
I’ve heard some horror stories of the bumbling of Freddie Mac and Fannie Mae but your story has to be one of the worst. Definitely should not be using these taxpayer funds to subsidize housing for child molesters. You should ask your Congressman to intervene. The people who screwed that sale up should be fired. Make that, “humiliated”, then fired.
I put an offer in on Friday, today I got a call and was told the asset manager accepted the offer so my realtor replied back by clicking accept. I talked to my realtor later in the day and another offer came in the afternoon. Are they obligated to staying with my offer since they accepted the terms. Its not signed yet as I have to wait for the paperwork. I do not know if the other offer is higher or lower. What have people experienced similiar to this.
Does first look only apply to when the property hits the market for the very first time or is it the first 15 days of when the property is back of the market… We are looking at a property that has been on the homepath site for about a year and this now makes the fouth time that it has come back to the market under first look. How is this possible?? Other properties are classified as back on the market so how would a first look still apply?
I am a first time home buyer. Found a foreclosed home from FNMA. Found the listing within 2 days of it’s first posting. Went to see the house. I liked it. But the realtor failed to show up. I looked around anyway. I immediately put in a bid very close to list price but slightly below. The scummy realtor blew me off for 15 days by repeatedly asking me questions but “forgeting”the answers. I signed the owner / occupant agreement. But the realtor failed to submit my bid in those 15 days. Now I’m bidding against investors who have friven the price up beyond my ability to buy. I was paying cash too.
Can I sue the realty company ?
You can sue anyone you want. The bigger question is have you been damaged and do you have supportable facts to back that up. On the surface I would say yes however cases like these are often not what they seem.
I’d recommend emailing Fannie Mae with your complaint, the following email address should work: Homepath_Online_Offers@fanniemae.com.
I truly appreciate your help and advice. Thanks for your comments. I did indeed write a letter to Homepath_online_Offers@yad yada. I explained everything.
And I do indeed have damages to show. I flew all the way from my job in China to see this house in Maine. I drove my car from Connecticut all the way to Maine to walk the property. The realtor promised to “Show me” the house, but when I called him when I got to town, he said an “Emergency Meeting” had come up and he couldn’t make it.
As a result to my own investigations, I find out that this creep realtor likely never submitted my bid. But I have it in writing and it’s dated via E-mail. I also have a video record of my visit to the property. That is dated as well.
I believe the Realtor tossed all owner/occupant bids in the trash and never submitted them and is seeking a cash bonus from investor types. How do I know this? I had a friend from a different State call this realtor and pose as an investor. This scumbag realtor actually mentioned a previous offer and under the table payout. He was actually pushing for a higher cash deal for himself and left it open to my friend to compete for the sale.
I have contacted FNMA to see if my bid was ever submitted. If it wasn’t, I will throw everything I got to a lawyer and drag em’ all into court. I’m livid. I’m beyond livid.
This scumbag realtor just brought a crapstorm upon himself.
I have been reading this forum for several weeks now as I had began dealing with Fannie Mae on a property of interest and a First Look situation. As an investor I was told I was NOT eligible to submit a bid for 15 days on the property (upon it becoming available). Well the scenario turned out that another offer was submitted as soon as the property came available and was accepted within 24 hours of the initial submission. Of course an affidavit of primary residence was submitted with that offer BUT the interesting thing here is my offer was $5k more and the property is one-half of a duplex villa on golf course in a mountain resort town. Now what are the chances of the winning offeror actually living in that residence as their primary home. What we appear to have here is a program (First Look) that handicaps persons willing to pay more by allowing others to potentially make false affidavits as to using the property as their primary residence. Ok, sure FM could fine them 10K and keep some escrowed money but that does little good to the third-party. SO HERE IS A QUESTION – HAS ANYONE HEARD ANYTHING AS TO THE CONSTITUTIONALITY OR ILLEGALLITY OF THIS PROGRAM AND ANY COURT CHALLENGES TO THIS PROGRAM? My congressman tells me FM is a quasi-governmental entity. I really wanted this property and this program prevented FM from getting more money for the property and mitigate the losses for the foreclosure.
FHFA has oversight over Fannie through the conservatorship, you might also try escalating there. I think one could make a compelling argument that FHFA is failing in their job to conserve taxpayer funds by not forcing Fannie to shut this program down. If you can’t convince your congressman, maybe you can convince them?
Tenants in Place is in direct opposition to First Look Owner Occupant. I been tracking a Fannie Mae property for months waiting for it to appear on HomePath. Tenants are given a 12 month lease, how can I live in the property as an owner occupant if tenants live in it. I am ready to put my house on market but if it sells and tenants have a 12 month lease and I am the winner of the bid, (should it ever come to market) and my present home sells. I could potentailly be homeless while waiting for tenants lease to end. I am buying the home to live there, I am willing sign an affadavit, and make a reasonable cash offer. I am no investor just someone who wants to downsize to smaller home in same City.
Fannie Mae gives tenant a long-term lease, offers rental assistance after lease expires, and an option to buy the property “for tenants only” and after waiting patiently for months, the property is sold to the tenants and never makes it to market. The MLS indicates the house was for sell prior to home going into foreclosure. So the tenants knew, if the house sold they would have to move anyway. So why is Fannie Mae making it so hard to purchase one of their properties?
FM has been doing this for a year now – but it’s extremely rare, and you just happened to find one of the very few. There are a ton of legal issues to go into the leasing business and they (along with the other major lenders) are loathe to get into it.
You’re not going to see this property hit the mainstream Program for at least another 1-2 years.
I spoke to a Fannie representative about their deed-for-lease program in which they give the homeowner a 12 month lease in exchange for voluntarily giving up the home instead of forcing the bank to foreclose. She said they were committed to the program, and that anyone with a Fannie loan was eligible to apply. Her feeling was that the key problem is that their servicers (folks like BofA, Wells, etc), don’t tell the homeowners about the program. I also asked how many done in CA since the program started… “less than 100″.
I am a couple years from retirement so I can wait the 1-2 years. I just hope the property will be in good condition after the tenants eventually move out. I thought the idea was to sell the property not to rent it out (12 months is way too long) it just a delay tactic, and the outcome will be the same regardless. It sounds good on paper, but the concept is riddled with unanswered questions. For example, what happens if rent is not paid, or if utilities are shut off due to non-payments, who is responsible for repairs?
And the most important, how do you get them out once the house has been sold, who pays if they will not go willingly.
If you know the answers, or you have experienced this please let me know. Oh yea, just in case you are wondering, I used to know the people who lived there several years ago, it used to be a nice house, I hoping it still is.
Once the lease is entered into its no different than being a landlord on any other property. They must make payments, or you can evict them. They are responsible for utilities unless the lease agrees otherwise. Repairs due to damage they cause should fall to them, and those due to normal wear and tear likely fall to you. Be sure to read the lease before you complete your purchase of the property.
The Fla Atty Gen’l has FINALLY started to prosecute a practice they call FLOPPING….where agents have paid off an appraiser to come in with a low appraisal so they can sell it to an investor who snaps it up and resells it at the true price. The agents never submitted offers from first-time homebuyers to the lender – then get a kick-back from the investor to quickly close the deal. While FM is aware of this practice, they can’t intervene unless the potential buyer notifies them that an offer may not have been sent to them…..or contact the Atty Gen’l of your State. SW Fla is one of the very few areas where prices are starting to increase as they curb this practice.
Is there no way to track your offer after it has been submitted to the listing agent? I have my eye on a propety in Cape Coral FL. that is substancially overpriced currently by a local Realtor. I am sure the price will adjust around the 30 or 60 day mark but it has not reduced at this time. If it is true that Fannie Mae is listing their properties 20% higher to avoid multiple offers and I place my offer at around 80% of list, I would like to have some assurance my offer reaches Fannie Mae and is not shuffled around while an investor moves in and scalps the property up. Any suggestions?
I bought in CCoral a year ago – and Zillow just announced this area has one of the fastest rises in the country. Oe of the issues is they’ve cracked down on ‘flopping’ – where appraisers were being paid off to low-ball the prices. We’re still seeing European investors snapping properties up at 10% under listing to do long-term rentals knowing that the prices are going up. There’s no where else in the country that has direct access to the gulf/ocean than the Cape.
If you’re looking in the SE or SW CCoral – check the country records for water assessments levied – which can be over $20K. The lenders won’t let you roll these into the mortgage and have to paid off in 5-7 years to the city.
The realtors are now pretty careful submitting your offer to FM – but also know that they have a roladex of investors to tell them what it is after the timeframe is up.
We just purchased a home through this program. We had complete intentions to stay in this house indefinitely and had no issues signing the occupancy affidavit. We have had the house for a couple weeks and have realized that there are some unforeseen issues with the area. These issues do affect our health and quality of life. We really do not want to stay in the house and are considering selling it and returning to our old house which is now a rental.
Is there anyway we can get out of the contract and put it up for sale again? If so what are the stipulations and or criteria?
Great question Wayne. I would hope Fannie was smart enough to realize that everyone faces life events that may require them to move or sell (though this whole program is so retarded nothing would surprise me). Read the fine print, hopefully you’ll find some exceptions, or at least understand the risks of breaking the rules. If there isn’t an exception built-in, then you might try simply asking Fannie for one.
Mine is actually through Freddie. I have a number from thier website, anyone have a number that might be better? Who should I ask for and how should I explain things? Thank You for your help
good insights John great to see this still going 3 years now. I believe there is something more driving this First look program. Is it possible there are some high dollar institutions that are profiting from this program? This whole notion to limit what buyers can buy seems to be counter intuitive to any of us that even slightly look below the surface. It does not make sense to me either, wouldn’t you simply want maximum dollar amount out of any REO property? Also by enabling folks who really can’t afford the prop by giving them various incentives to buy now, won’t these prop’s eventully just be returned to the REO market but in worse shape because the previous tenants (I call them tenants cause really they are just renting it not buying it) could not afford to fix/keep up the property. I am starting to see props that are on thier second or 3rd foreclosure go around.
Some of the other comments on FLOPPING ARE FIMILIAR. Here is one I have run into many times. When there is a hot prop with multiple offers/bids, the insider simply tips off his friend what the highest bid is. The friend then only has to beat the highest bid by a few hundred dollars to get the house. Had it happen to me. out of 20 bidders we were second highest, by 100 dollars! Which happen to be exactly the commision plus 100 dollars. Our bid was with no buyers commsion, so they simply added the buyers commision plus 100 bucks! It worked out to the penny. We suspect this has happened about 5 times to us. Another prop had no price drop for 3 months than a massive $50k drop all at once. Well us and one other bidder were bidding on the property. Eventually they beat us by $1k then we found out, after it closed, it was an agent inside the office that got the prop! We even confronted them about it and they said there is no way the insider was informed of our bid. RIIIIIIGHT!
Sorry I mean Sean
FLOPPING has now gone viral since the Agents figured out how to get dual commissions on each listing. See: http://moneyland.time.com/2011/06/13/the-newest-real-estate-trouble-flopping/
The ONLY way to stop this is through a Sealed-Bid process. All offerers submit a bid to a 3rd party to be opened up at a specific date/time…..which cuts the Agent out of the picture.
It’s a simple process, and I can’t understand why the Banks don’t implement it. They could use the (bogus) appraisal as their minimum starting point – but in 90% of the cases will prob get a higher return.
Yes exactly. I do know there are big consequences for bid rigging which is exactly what this is. I’ve attempted to report folks doing this but there is no follow up from anyone. I had another instance where the agent did a Flop with a super low intial price. $240k below real price. The agent dicouraged people looking at the prop. Told us the basement was “torn up and in bad shape”. We viewed the property and it was move in ready, the basement was in perfect shape nothing wrong with it. His listing forgot to mention the prop backed to a golf course too. The prop got 12 bids yet the prop sold for exactly asking price? How does that happen? the same agent then relisted it several months later at a $200k price increase! I then contacted the seller, a bank, and actually talked to their fraud investigater gave them my name phone number told them the above details. No response! There is really no follow through on these types of fraud I’m not even really sure if there are any laws concerning these types of issues.
A Fannie Mae First Look property hit the market in my area yesterday. My agent called the listing agent within hours and was told there was already a cash offer. Considering there is no lock box on the house yet, there are no pictures in the listing, and they are paying cash, I do not believe this is an owner occupant- it screams investor. Do we have any recourse? I am an owner occupant and really want this property. I’m getting the vibe the listing agent really has no interest in us offering based on the things she told my realtor. What do we do?
Have your realtor write up your offer anyway and track down the listing agent or take it to his office and hand deliver it. Make your offer higher than asking price. Make the amount higher but not to high as to over pay for the prop. There are tricks to getting in touch with a realtors that do not want to be contacted. One trick I found was call them and act like you have an expensive listing and want to talk to them about listing it and set up a meeting ASAP, then they must submit your offer by law. Insider deals the selling agents always discourage, get angry, act offended, and otherwise act like they don’t want your business, these are sure signs of an inside job. I have encountered about 5 or more inside jobs over the last several years. Keep in mind that if it’s an inside job you have very little chance, the sellers agent will just get his insider with the cash offer to beat yours by a certain amount over yours. But it is worth a shot. Also I have been able to spoil a few deals by bidding up to where I can still make money but the insider won’t have as sweet of a deal, that worked on 3 propertys. Took about 20-40k away from the insider(s) but they still got the props.
i have won every property I wanted when it’s a legit bidding process because I keep my costs super low so I can outbid other bidders. But when there is an insider I have lost everytime because they know my bid. But you can spoil it somewhat for the insider by uping the price to what you would like pay to have the prop for, because by law they must submit your offer if yours is higher than the insider. Also Keep track of the property see if it is relisted after it is fixed up supposedly this is breaking some sort of rule on First look prop but good luck getting anyone to do something about it. I even alearted the selling bank to a scam and never heard back. Another route is to contact the selling BANK yourself but you have to do it fast. Your realtor cannot contact the seller/BANK but you can because there are no rules againts you contacting them.
After you submit your offer as C suggested, if they still refuse to submit it, then I’d recommend emailing Fannie Mae with your concern, the following email address should work: Homepath_Online_Offers@fanniemae.com.
You should do both immediately. Once Fannie has accepted the other offer I seriously doubt they’d look at yours regardless of any shenanigans.
Thanks for the reply! We offered 15k over the asking price and were just notified yesterday another offer has been accepted. Apparently there were 4 offers, including at least one cash offer. I have suspected all along there is an insider, in which case it probably didn’t matter what I offered, I would have lost. There has just been something that didn’t seem quite right the whole time we’ve been dealing with the selling agent.
I know it is a long shot at this point, but should I still at least try to alert Fannie Mae to the possible impropriety? Or just move on? I am going to be so angry once I see what it closes at if it is less than we offered! I am really disappointed at this point and feel like just giving up if this is just going to keep happening.
That’s a hard question whether to pursue some sort of action. Right now there is not much recourse. I have “filed” complaints. But I’m not even sure the complaint was ever reviewed. So if if makes you feel better do it. you won’t run up against these insiders all the time. really it is the minority of sales where there are insiders. But I do find that when there is a screaming deal, almost to good to be true, it’s about 30% of time insider working it. I can suggest you keep an eye on the property via the MLS or Realtor.com or drive by it if it comes up for sale in 1-6 months it’s an investor flip which supposedly is not supposed to have a shot at these FIRST LOOK props. But I have only found some info about a $5k fine can be imposed but that is for the realtor not the buyer. If anyone knows differently please let me/us know. As far as the winning offer being lower than yours you will probably find that the winning offer is a very small amount over your usually 1000 dollars or less. You have to calculate in the buyers realtor commion lack of or paid, sometimes the buyer is the agent and sometimes no commision is paid. The really frustrating ones are where an insider agent in the office that listed the prop is the buyer and then resells it short time later as the listing agent. See my above comments. Hopefully you bid it up enough to make it not such a money maker for them. You are also correct when the selling agent is acting biligerent un-friendly or down right angry towards you or your agent, that is a sure sign of inside job. What agent is not happy to get multiple offers on thier listing it just means the price goes up and so does thier commision. So its counter intuitive that the selling agent should be hostile to other offers.
Agree with all other replys on this one. As soon as an agent gets bilegerent if you want to put in an offer, then guarnteed they got an inside deal going. So best action is to get real aggressive. But I have found that ultamately the insider(s) tip each other off as to the highest bid and thus can always beat your bid. As I detailed before above my own experience just on one prop. 22 bidders one property I was outbid by 100 bucks?. $220k prop. The listing realtors got very angry with us when we went to our maximum on the bid. I believe their insider made about $30k on an immediate resale but without my “max bid spoiler” he would have probably made $80k or more per my calculations. After I got savy to the insider dealings, I tryed many things but the insider will always win because they know your bid. Really its breaking the law concerning auction laws. There should be a rule/law that all bids are sealed and opened at a given location where results will be reviewed in front of bidders. If someone out bids me fair and square I am more than happy to walk away but these insider deals make me very angry. Because as I said when I’m in legit bid competition and have reviewed the prop and know my costs I have always 100% prevailed.
Just one clarification C – these sales aren’t auctions and the seller can select any offer they want regardless of whose was highest and best. Obviously you at least want the seller to see your offer… which I think is the key issue here.
One suggestion – when bidding on these deal directly with the listing (REO) agent and let them have both sides of the commission. Regardless of the implications, dual agency is legal in many states, and clearly the agent is going to be more motivated to help their client if it doubles their pay.
FM ‘First Look’ is merely a band-aid, not a cure. We ran into the same situation, and I took some drastic steps. Listing agent kept giving us the run-around…multiple offers, house in bad shape, etc. I went through the (online) County records and identified who the Seller was. Called them and left a msg stating we were trying to buy the house and didn’t believe their agent was acting on their best interest. Within a day we had an approval to move forward.
Your agent is NOT allowed to go around the listing agent – but nothing precludes you from doing whatever is necessary to get your dream house. You might piss someone off along the way – but so what. I would also get ahold of FM and document it – and a subsequent complaint to Board of Realtors about the agent will trigger an investigation.
In today’s market these double-dippers will continue to flourish – but every buyer needs to also do their own part to bring these abuses to light.
The First Look prgram is a scam pushed through congress by, and for, the banks. The Banks are not actually losing money on foreclousures. Many times the bank has been paid for 5-10 years on a prop. At the beginning of any loan its all interest paid. I have attended county auctions and have bought foreclousers many of these props are reselling at well above the value of the prop so the bank gets 5-10 years pure profit plus resells the prop at a decent price. Now here’s the kicker the banks know this and have figureed it out so they pushed this First look program through. why? because they want the above process to keep repeating because they want turn over on propertys which mean new loans, and multiple years where payments are all interest. And by getting buyers in that can barely afford prop and certainly can’t fix it up, its almost certain these props will be turned over again. I am seeing many props that have gone through foreclosure multiple times. Don’t believe these banks that they are losing money on these props quite the opposite I believe. I could site examples with dollars amounts but my fear is I would be boring anyone who might be reading my rants.
C, These days the banks are largely just servicers… meaning they are just the middleman. As such you are right that they profit regardless as they get a fee for handling the property each month, and fees during the foreclosure process. That said, servicers don’t get the interest, nor the proceeds from the sale (other than any past due fees get repaid out of it). The one catch here is that many of the servicers were also originators, so they do have some risk of the investor, who is absolutely taking big losses in most foreclosures these days, coming back after the bank for having made a bad loan.