All Forum Posts by: Bob Kennedy

@Dave, thank you again for your input!

@Luis-
I see that commission remark is becoming a sticking point, I should probably change that in the original post ;-).

The commission comes out of the bottom line. We don't pay it directly, granted. Essentially it's being lost because FNMA is ultimately paying it -- and ultimately the net proceeds paid to FNMA will be lessened by that number.

But that's a far less important concern and I'm realizing I left you the wrong impression the way it was written, I apologize for that. It was a sidenote to my primary question, which was related to what happens in my situation and whether there is any latitude.

Here's the snippet summarizing my concerns:

Assuming the Short Sale option is out, I'm left with the only alternative, staying in the property with my "bonafide lease" until the property is sold or the lease term expires.

If I continue leasing the property while FNMA becomes the owner, can anyone tell me whether FNMA will give me any "first right of refusal" option to purchase the house if another offer is made? Or, if there is any way I can negotiate a purchase from FNMA before it is listed publicly with Homepath? It seems crazy to pay agents 5-6% of the price only to submit the paperwork in this situation? From posts I've read here, it sounds like my goal is not possible with FNMA, although it might have been with a smaller bank.

Is there any exception or way around this?

My greatest fear is that FNMA will price the home higher than I can afford once listed on Homepath. If Homepath lists the home at the current Zillow estimated price, the house will exceed my means by about $10k. I do believe I can lower my monthly debt to qualify for the property, but it's the absolute maximum I can afford. Any higher, I won't qualify for the house and I'll be forced to move.

I have this pit-in-my-stomach feeling of not knowing what's next, and how I can take control of the situation to negotiate with the bank rather than sitting idly by while the house is potentially lost. For example, I have no idea if, despite my being a tenant, FNMA will list the house for sale immediately, or they will wait until my lease expires.

@Dave Meyer,
Thank you for the input. In our case, we're not in a risky financial position and we're very comfortable with the numbers. These days, there can be a vast difference in being financially healthy and the manner in which banks evaluate mortgage qualifications. But that's a topic for another post and I'm hoping not to get sidetracked discussing the opinions or finer points on that one!

Regarding the RE agent, the percentage comment is anecdotal. It's not the gist of my concern, but more of a point that with Homepath, someone needs to upload our documents, and in this transaction that is all that would be required for them to essentially earn $20k. It is what it is, however -- and I can deal with that if it has to be.

If it's possible I'm hoping to avoid getting too far sidetracked or off-topic with the context, and instead determining how this sort of thing typically unfolds with Fannie Mae, and/or whether there is any latitude within that.

Thanks again for your input :-).

Full Disclosure: I am a tenant in a property going through foreclosure, not a real estate investor. After searching on Google, then reading hundreds of posts here, I found this site to be the best authority and most friendly community. If it's not okay for non-investors to post, I apologize in advance and will delete my post if I've bothered anyone.

I am a tenant in good standing, in a property owned by FNMA, serviced by BofA.

The landlord/homeowner of my property had run into some money issues. Once he recovered, he was unable to rectify the issue with the bank (based on my limited understanding; the owner is upfront and willing to help me in any way he can, but there is a limit to what I know about his dealings with the bank).

The bank is in the midst of the foreclosure, at the final stage/court date in a few weeks, from what I understand.

I would like to purchase the house if at all possible. With that said, there is no quick-and-easy option because I cannot afford to payoff the note, or obtain financing for the current mortgage which is "underwater".

The current FNMA mortgage being foreclosed is $50k higher than the estimated value of the house (which is also consistent with Zillow's valuation). I understand there is a second mortgage held by Wells Fargo for $100k.

I've spent dozens of hours researching BiggerPockets and come up with a few ideas...

1) I could keep my lease, leveraging the "Protecting Tenants at Foreclosure Act" to stay in the house through the foreclosure process, until the home is listed on Homepath.

2) I could try to find some way to negotiate with BofA/FNMA pre-foreclosure, which may involve some type of short-sale.

After reading this forum, I've learned about some other methods, but the two above seem to be the most realistic options in light of my situation.

The short-sale appears to be the best option at present, because it guarantees I wind up with the property. Unfortunately, the bank will not deal with me, and it's been suggested that it is coming too late in the process regardless. If any of the experts believe there is a way around this, I'm very eager to learn more.

Assuming the Short Sale option is out, I'm left with the only alternative, staying in the property with my "bonafide lease" until the property is sold or the lease term expires.

If I continue leasing the property while FNMA becomes the owner, can anyone tell me whether FNMA will give me any "first right of refusal" option to purchase the house if another offer is made? Or, if there is any way I can negotiate a purchase from FNMA before it is listed publicly with Homepath? It seems crazy to pay agents 5-6% of the price only to submit the paperwork in this situation? From posts I've read here, it sounds like my goal is not possible with FNMA, although it might have been with a smaller bank.

Is there any exception or way around this?

My greatest fear is that FNMA will price the home higher than I can afford once listed on Homepath. If Homepath lists the home at the current Zillow estimated price, the house will exceed my means by about $10k. I do believe I can lower my monthly debt to qualify for the property, but it's the absolute maximum I can afford. Any higher, I won't qualify for the house and I'll be forced to move.

I have this pit-in-my-stomach feeling of not knowing what's next, and how I can take control of the situation to negotiate with the bank rather than sitting idly by while the house is potentially lost. For example, I have no idea if, despite my being a tenant, FNMA will list the house for sale immediately, or they will wait until my lease expires.

Thank you in advance for any suggestions,
Tiff & Bob