One of the sections that will impact short sale sellers and REO agents nationwide is the prohibition of banks making the sale of a short sale conditional upon the lowering of commissions.

If you’ve ever listed your home for a short sale, you’ve probably seen the following statement in REALTOR remarks:

COOPERATIVE COMPENSATION OFFER SUBJECT TO COURT OR LENDER APPROVAL AND MAY BE ADJUSTED.

Well now it now also violates Fannie Mae guidelines for banks set forth in its Servicing Guide:

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers

No Negotiation of Preforeclosure Sales Commission

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

New Fannie Mae Servicing Guideline

Link to the whole Announcement 9-03

Why do you care as a seller?  Isn’t it good to pay less commission?

This is good news for everyone:  home sellers, REO agents, consumers, and banks in the long run, because it removes a large impediment that some agents had showing short sales.  Not only are short sales difficult and painstaking, but there was also the chance that the selling agent would make less than the listed commission.

Please contact me if you need more information or see some of the related posts below.

Loan Program from Fannie Mae

Fannie Mae, the Federal National Mortgage Association, has announced a new program for buyers purchasing Fannie Real Estate Owned Properties (REOs).

The motivation behind this program is for Fannie Mae to quickly sell off foreclosed properties. If the parameters fit,this could be a bargain for a motivated buyer. If you will occupy the property, you can put as little as 3% down and an appraisal is not required – the selling price will determine the value of the property. A gift can be used for the down payment/closing costs and no mortgage insurance is required but you must have a 660 credit score.

If you are going to occupy the property, you are eligible for a light renovation loan which can be added to the loan amount. The renovations must be approved and completed within 90 days of funding the loan.

Search For Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt Foreclosures

This product is also available for buyers purchasing a second home but requires 10% down and buyers purchasing an investment property may also put as little as 10% down. The minimum credit score has been lowered for these programs but buyers will still be evaluated on a case by case basis.

This program is available to buyers of condos and properties up to 4 units. For those putting 25% down, you may own up to 10 properties.

Free Foreclosure Search – From Coast to Coast!

For more information about the current financing market or to get pre-approved, call
Tom 928-775-9330 or email him at tomhenichek@cableone.net.

Fico Scores/Reports

Associated Press

You’re paying your bills, but your landlord isn’t. And you’re the one holding the eviction notice.

This is becoming an all too familiar scenario for thousands of renters nationwide who have become the unintended victims of foreclosures. Banks are booting good tenants onto the streets with little to no notice after seizing a property from a delinquent owner, ignoring tenant leases.

In the most troubling cases, some families are forced into shelters for temporary housing because they have little savings to cover moving costs, first month’s rent and a security deposit at another apartment.
Fannie Mae this month pledged to change that with its new renter policy starting in January. The plan will allow renters living in foreclosed properties to sign new leases with Fannie while the property is up for sale, or give the tenants money to relocate. Fannie has yet to establish the length of the leases, and the amount of move-out assistance will vary by state and property.

Freddie Mac says it will unveil a similar program in a few weeks.

But how does a renter know if his landlord has a Fannie- or Freddie-held mortgage? Worse yet, what about renters of landlords who don’t?

Fannie plans to reach out to tenants, says company spokesman Brian Faith.

“Most tenants don’t normally know the details of their landlord’s mortgage arrangements, but we’ll be contacting the tenants in foreclosed properties we own to make them aware of the option to stay in their home through a lease with Fannie Mae,” he said in an e-mail.

The details of Freddie’s tenant plan are still unavailable.

The pair own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. Fannie estimates about 4,000 tenants live in the company’s foreclosed properties and would be eligible for the plan.

Unfortunately, that’s just a fraction of renters facing the consequences of a landlord’s foreclosure. Renters in large complexes are likely safe because multifamily loan delinquencies are still very low. But 15 million renters, or about 40 percent of all renters, live in single-family homes, many of which are owned by mom-and-pop investor landlords. This is where the risk lies.

What should you do if you receive a foreclosure or eviction notice?

“Don’t panic or stick your head in the sand. Neither action will be helpful,” says Robert Baker, education coordinator at Housing and Credit Counseling Inc. in Kansas.

Call the sheriff’s department first, Baker says. Find out how long the foreclosure process takes. Is it 60 days or 90 days? Then you’ll have a timeline to work with and time to prepare for the worst-case scenario.

Next, get on the Internet. Find out the rental laws in your state. Some states, including California and Illinois, have recently passed legislation giving renters a grace period, ranging from 30 days and up, to stay in a property after it’s been sold in foreclosure. Others are considering similar legislation.

The U.S. Department of Housing and Urban Development outlines tenant rights by state on its web site www.hud.gov.

The lender’s name or its lawyer will be on the eviction notice. Contact either one to let them know you’re in the property. Find out what your options are. Will the lender let you sign a new lease or is the bank offering some cash assistance for moving out? Don’t let the lender bully you into moving out sooner than stated by law.

If you’re nervous negotiating with the lender on your own, contact a local nonprofit housing counseling agency for help. HUD’s web site lists agencies by state or you can call its toll-free number 1-800-569-4287.

Tenant rights lawyers are few and far between and can be expensive, Baker says. And unfortunately, legal aid offices around the country are facing severe budget cuts, says Amy Marx, an attorney at New Haven Legal Assistance Association Inc. in Connecticut.

Her office only has enough staff to help those renters whose landlords have a Fannie- or Freddie-held mortgage. The others, she says, they have to turn away.

“I hate to say it, but we just don’t have the resources,” she says.

You can also do a little digging into your landlord’s financial situation if you’re worried about a possible foreclosure. Go to the county courthouse or its web site and do a rudimentary background check on your landlord. District court records or the county recorder’s office will show if any foreclosure actions or judgments have been filed against your landlord. Are there any other records showing financial distress like past or present bankruptcy filings? These can be telltale signs of a landlord strapped for cash, Baker says.

Also, call your local Better Business Bureau to see if there have been any complaints against your landlord. This can be a clue that something isn’t right.

Last, has the condition of your rental property suddenly deteriorated because of neglect? If the landlord isn’t making repairs, maybe it’s because he can’t pay for them or doesn’t want to spend money on a property he’s about to lose.

In the meantime, save your money for a rainy, forced-out-of-my-home fund.