Fannie Mae & Freddie Mac are cracking down on lenders

Posted on October 6th, 2010 in All Articles.

Chicago IL – Fannie Mae & Freddie Mac (I’ll call them Fannie & Freddie in this article) are finally starting to realize that lenders are not doing their job. Between the two of them, Fannie and Freddie own around 55% and 65% of the country’s mortgages.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

Freddie and Freddie have other companies act as the lender on their behalf. Those companies collect all the payments, run the accounting, and forward the check to Fannie and Freddie.

In my opinion, these lenders are not doing their job. The owner of the loans lose lots of money because of these lenders incompetence. I have seen this first hand. Let me give you a few examples.

Homeowners that would like to keep their home get no help on a loan modification. Homeowners that would like to sell have to suffer through a long, drawn out short sale process.

A clear cut example was a property that the bank refused the short sale offer on. The owner of the loan was Fannie Mae.

The property was listed as a short sale and a $119,000 offer was presented to the lender. The lender rejected the offer. The house was later foreclosed upon and resold for $96,000.

It appears Fannie Mae lost over $25,000. I am sure many loan modifications are turned down only to see the lender lose more money through foreclosure.

Here is how this would work. Someone can’t afford their payments. They ask for a reduced payment. The homeowner offers to pay the lender the amount that would pay a $200,000 mortgage. The lender turns it down.

The house is foreclosed upon and sells for $165,000. It looks like the owner of the loan lost $35,000. Make sense? This has been going on for 2 years, and probably even longer.

But finally, the “chickens are coming home to roost.” According to a recent story in American Banker, it sounds like Fannie and Freddie discovered what was happening. [1]

The story says that Wells Fargo will stop granting extensions for certain short sales. But, why start doing that now? Why didn’t Wells Fargo do that 12 months ago?

Because Fannie and Freddie actually started looking at what was going on. They didn’t like what they saw and told lenders to stop delaying foreclosures. Lenders that delayed the foreclosure faced fines and on-site reviews. [1]

An on-site review would scare any lender. Who wants the investors they are supposed to represent going through their files one by one. I think those lenders are scared that they would find mistakes and negligence right and left. It looks like the crazy world of short sales just got a little nuttier!

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at myrealtorphil@gmail.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (312) 953-6725.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Remember to visit my Chicago short sale blog frequently for great tips and advice on short selling in Chicago www.Chicago-ShortSaleBlog.com

Thinking about a loan modification? Our Chicago Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this, Phil Buoscio.

Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..

Phone: (312) 953-6725. myrealtorphil@gmail.com.

View My homes for sale at www.BetterLivingRealty.com.

Phil Buoscio, is a broker with Better Living Realty he leads the sales team “Phil Buoscio Team” and specializes in short sales in Chicago Illinois. Chicago Loan Modification Help can be referred to you. We don’t do loan modifications ourselves but we work with those who do. We know Chicago Short Sales. I am a Chicago Short Sale Realtor. Chicagoland Short Sale Realtor. Chicago IL Short Sales. Chicago Realtor. We do business in Pilsen. McKinley Park. Bridgeport. Wicker Park. West Town. Ukranian Village. Lincoln Park. Near North. River North. East Village. Logan Square. Uptown. Edison Park. Portage Park. Hermosa. Lincoln Park, South Loop, West Loop. Bronzeville. Hyde Park. Kenwood. Oak Park. Brookfield. Cicero. Berwyn. Evanston. LaGrange. LaGrange Park. Riverside. We sell condos, single family homes, lots, land, multi units, two flats, three flats, etc.

References

1. http://www.americanbanker.com/news/wells-nixes-extensions-1026457-1.html

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Buoscio’s personal views and do not reflect the views of Better Living Realty – Buoscio Brokerage, Inc.. This information on Fannie Mae & Freddie Mac are cracking down on lenders is provided as a courtesy to our viewers to help them make informed decisions.