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  • Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

    I think Fannie Mae is very painful to work with. It seems that they are now trying to shuttle borrowers to a new deed in lieu program after they (Fannie Mae) have declined a short sale (or a pile of them) on the valuation issue. This with Fannie Mae's overpriced valuations. So I am curious if any of you have actually seen a successful DIL with Fannie Mae and possibly even a junior lien. And did they require a borrower contribution or note for part of the shortfall.

    Your insights are appreciated as always!

    If you want to see a Bloomberg article about this issue, here is the link Fannie To Allow Walkaways by On-Time Borrowers: Mortgages - Bloomberg
    Pamela Palmer, Office Manager, Prudential Fine Homes Specialist..916-837-4500
    El Dorado Hills, Folsom, Sacramento California Sales & Marketing
    http://www.askpamela.com

  • #2
    Re: Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

    I have experienced this too Pamela, and I don't like it! I have a Fannie Mae short sale that they required over market value and the Buyer rejected. Back on the market at the higher dollar value, no interested parties. At the same time, I created a valuation dispute direct to Fannie Mae (I am attaching a link to a blog explaining the valuation dispute process, for those that don't know how to create a valuation dispute) Real Estate Forum - BPO Value Dispute Process. Fannie Mae BPO value dispute process.

    In the case that a deed in lieu is going through, they agreed to reduce the amount they would value the property at, but one of the obstacles with this short sale was that it has a collection judgement. Now they are being offered a Deed in Lieu. I know they were going to have to pay off the judgement do complete the deed in lieu. In this case, I got the collection judgement to reduce from requiring $5500 to release the lien, down to $1700.

    It kicks the Realtors to the curb who have had perfectly reasonable offers rejected. It is hard to take! Especially when I dealt with the collection agency to allow them to pay such a small portion of their collection........all so they can do a deed in lieu. Do you hear the S L A P echoing from my face?

    I thought they only offer the deed in lieu alternative to those who only have a first mortgage, unless it has two mortgages with the same lender. I have also heard of the first offering a 2nd mortgage money to release the lien to allow the deed in lieu, but have never experienced that myself.
    Kim Knox
    Principal Broker, Owner, ABR, GRI, PME, A-REO, REDCpro,
    541-899-7222
    Licensed to conduct Real Estate in the State of Oregon

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    • #3
      Re: Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

      Hi everyone,

      I begin working on one that is 30 days away from default being recorded as of today. The only offers at this time are $250-$275,000 with a repair bid estimate from licensed contractor is $25-28,000 that is 3 years old.

      The property also has red-tagged gas appliances, the forced air heater, stove, oven and chimney are all red tagged in addition to possible mold or damage to flooring as a result of a flood from busted main pipe under the house a few years back that insurance would not cover.

      The house is worth $314,000 per coreLogic AVM on Realist in the MLS and the range is $276,000-$351,000.

      Lets see how Fannie Mae views it and what price tag they put on it shall we?? I will keep you posted.

      Comment


      • #4
        Re: Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

        Thanks for the insights. It will be interesting to see if the DILs start actually going through. I guess this is Fannie Mae's way of getting around our commission and getting the property into their homepath program. It's just plain wrong.
        Pamela Palmer, Office Manager, Prudential Fine Homes Specialist..916-837-4500
        El Dorado Hills, Folsom, Sacramento California Sales & Marketing
        http://www.askpamela.com

        Comment


        • #5
          Re: Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

          I just got done submitting a request on behalf of another agent, so I will keep you posted on this one too.

          Comment


          • #6
            Re: Is Fannie Mae Actually Approving Deeds in Lieu? Under What terms?

            I am disgusted by Fannie Mae. They have turned down any offer under their value, even though I am marketing the property fully and have had 4 good offers. And of course, they will not release documentation on their valuation. So they (and Green Tree) are offering the borrowers a DIL. That takes the commission off the table.

            On a different but related topic, trying to represent a buyer on a Fannie Mae REO is ridiculous. Yes, agents and buyers are successful however FNA and HomePath are poorly run in my opinion.
            Pamela Palmer, Office Manager, Prudential Fine Homes Specialist..916-837-4500
            El Dorado Hills, Folsom, Sacramento California Sales & Marketing
            http://www.askpamela.com

            Comment


            • #7
              Re: Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

              I just pulled a short sale from the market because Wells Fargo offered a deed in lieu, on a loan backed by Fannie Mae. Fannie Mae would not agree with my market value dispute and offered the Seller a deed in lieu and $3000 for agreeing to cooperate. Wells Fargo also insisted that he pull the property off the market because they thought it would take a few months to get an approval for a DIL, and were unable to have it active in "short sale status" at the same time.

              Instead of letting me continue in my efforts to bring them a short sale offer, they pushed me and all of my efforts, money, and time out the door. My Client was great, and offered to just keep it in short sale status, but I was worried we wouldn't get an approval if they wouldn't agree to my market value. Then he could be forced into foreclosure for continuing to try a short sale with me.

              Another one bites the dust.
              Chris Knox, Principal Broker
              Jackson County Oregon Real Estate Sales
              http://www.LandlineRealEstate.com

              Comment


              • #8
                Re: Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

                Seems the banks are not that interested in short sales anymore because values are on the rise. Homepath's renovation loan is not going to be available anymore starting in October, that says something.

                Comment


                • #9
                  Re: Is Fannie Mae Actually Aprroving Deeds in Lieu? Under What terms?

                  Our Consumer was wonderful, and offered to just keep it simply speaking selling reputation, but I had been worried whenever they wouldnot consent to my market price we wouldn't get an endorsement. Then he might be required for continuing to test a short selling.

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