Hi, I have been looking at a Fannie Mae REO and was doing a bit of research on it. I searched the county records and found the amount that FNMA bought the property for at Auction. It was around $50,000. Now the property is being listed on the FNMA website for around $20,000. Why would FNMA purchase the property at auction and then list it for less? Is FNMA required to list the price at FMV initially? How do they determine FMV?
Thanks for any help
I'VE BOUGHT 2 FANNIE MAE REO'S OVER THE PAST YEAR HERE IN MICHIGAN. F/MAE SIMPLY PAYS OFF THE BANK(I THINK IT'S ABOUT 85%
OF FMV). THEN F/MAE LISTS AND SELLS IT THROUGH A REALTOR. THE 2 I PURCHASED WERE ABOUT $20,000 BELOW FMV AND ABOUT $10,000-$12,000 LESS THAN THE ASKING PRICE. F/MAE'S FLEXIBILITY HAS DEFINITELY BEEN TIGHTENED UP THOUGH OVER THE PAST YEAR.
I CAN'T ANSWER YOUR QUESTION REGARDING WHY THEY WOULD MARKET THE PROPERTY BELOW FMV. I'M NOT DOUBTING YOUR RESEARCH, BUT COULD YOU HAVE POSSIBLY GOTTEN "BAD" NUMBERS??
THEY TYPICALLY LIST THE PROPERTY FOR FMV IN THAT SPECIFIC AREA AND WORK DOWN FROM THERE.
I HOPE THAT'S A LITTLE HELPFUL.
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You posted the exact same message at least three times...please stop wasting everyone's time by resurrecting multiple old threads just to post this. If you want to start a new thread, great, but a single post would have sufficed.
That said, I'm curious to know which specific term FNMA said your friend violated?
While I'm certainly not a fan of FNMA, my experience with them over many deals is that they are careful not to do anything that would result in obvious negative press or a lawsuit, so my guess is that there is another side to this story that you're not telling.
While FNMA's addendum generally gives them the right to back out of a deal for pretty much any reason, I've never seen that happen, and would be VERY surprised if they backed out just because they got a better offer, and I'd be VERY, VERY surprised if they did this and then tried keeping the earnest money.
If the story is as clear cut as you say, why did the escrow/title company release the earnest money to FNMA. Generally, if there is any reasonable question about who gets the EM, the escrow agent will refuse to release the funds and require a court to decide who gets it.
The fact that the escrow agent did release the funds to FNMA says that they believed it was clear they deserved it.
And, besides it can be quite annoying to read all the way through to the post to only see the newest added info to be the same thing over and over again.
I agree with J Scott, title must have felt compel to release the EMD legally.