Fannie Mae Short Sale

[kentate]

Calling all experts...As I've stated, I've worked with Short Sales (about 30) and have run into all kinds of problems....Here we go again, so any help will be greatly appreciated.....

A property here in Texas had an offer on it for $49K...The lender did all of it's wonderful magic and determined that they would accept $67K. The BPO and appraisal came in and evidently $67 is not only the least they'll take, but the listing agent is telling me that there is mortgage insurance on the home and there is no reason for the lender to consider anything lower....

The home has some problems and in our opinion is not worth $67....Any advice on how to proceed with a property like this?

By the way, I've seen a lot of these of late, so any advice will be greatly appreciated...and will help with future deals too.....

[michelle1976]

What we typically do is ask the bank what comps were used to determine the value of the property.  We than present them with additional comps as well as repair estimates on the property.  Sometimes it works and sometimes it doesn't.  Do you know what the payoff amount is?  If you have the contact information for the person that did the BPO I would advise you to call them and see if you can get them to tell you what their BPO came in at because sometimes the bank fabricates their numbers

Michelle

[kentate]

Michelle1976,

Thanks for your response....This is not a friendly environement. A Realtor had the home listed and actually showed the home on the MLS as priced at $49,900, which he said was the offer that came in from an investor.....All info comes from this agent....Not sure how reliable the data is.....So, the BPO is not available.

Upon getting the offer, the bank did two things....1) ordered a BPO to determine value and 2) contacted the MIP company so they (the bank) wouldn't lose any money....This seems to happen a lot as most people over the past couple of years put very little money down, usually less than 20%, which means most loans would have MIP insurance. With that being said, unless there's something that I don't know, the bank will not be interested in negotiating as they should be holding a pat hand.

My wife can look up financial data and we can kind of back into what is owed, but if there's MIP, does it really matter?

[LyonelK]

Kentate,

I have ran into this problem several times and it can be an easy fix, I work hundreds of short sales and heres my idea:

In the case that the bank returned with a counter offer of 67k does not mean that they are not willing to accept less.

A counter offer is essentially a number that the investor returns with that will guarantee you an approval. You do not need to meet that figure, if you have a buyer that is willing that is great. If you buyer is not willing to come up and you feel the offer is strong and around fair market then get some comps together of surrounding properties that have sold recently and submit them. Appraisal is another option as well, or even raising the offer is another option.


I know that in Texas lenders can not have homeowners take notes, so the investor may be looking for a higher purchase price.

Something that is important is that lenders and investors have guidelines to what they are willing to accept. Typically they are not willing to drop below 80% of BPO so if they you have been countered by the bank you probably are not in that range. Another items to take into account is that some agents inflate BPO prices, you may have to request another BPO. In order to have the bank request another BPO you will have to submit comps.

Good Luck! Dealing with these banks can be a drag!

-Lyonel

Private message me if you have any questions.

[michelle1976]

Hi Kentate, Lyonel is right.  Depending on who the loan is insured by the bank will take a net offer up to 80% of the BPO in some cases.  In many cases listing agents don't know or don't think that it is possible for the bank to take a 50%-60% loss on the property but we do it all the time.  Don't worry about the PMI.

Resubmit an offer and a new HUD for what you think the property is truly worth.  Make sure you send in your own comps and a repair estimate to back your number up.  They may or may not be willing to work with you.  I'm not sure what the true value of the property is but if the value is 49,900 and your bpo came in at 67,000 you may just have to let this one go.

What part of texas are you in?

[kentate]

Big D......anywhere close to you?