View Full Version : Screwed by Fannie Mae
OK, so we're buying a Fannie Mae forclosure, negotiate a price, and get our offer accepted.
The day after the offer is accepted, I read something that says that "Buys of Fannie Mae HomePath homes will receive up to 3.5% towards closing costs or applicances."
They clarify the "up to" being related to lender restrictions on seller assistance to the buyer.
I ask the question - "WTF? Why didn't you offer me this incentinve" to which they essentially reply, "Too bad, you already have a contract. Go pound sand."
Their realtor said our realtor should have known. When our realtor asked their realtor, HE didn't know about it, and only started acting like he did after the fact. So, if THEIR Realtor didn't know about this, how is OUR Realtor supposed to have known? When she asked him he replied "They have all sorts of incentives but you have to finance through them" which is NOT true for this incentive. Furthermore, HTF am I supposed to have known? I found out entirely by accident.
This is THEIR advertised incentive, and other HomePath properties actually list this in the description of the property. This one didn't, and would / should have been eligible.
I feel kind of screwed here. I know I'm not getting anything, but I am going to bitch up the chain to whomever will listen for whatever it's worth. Maybe I can get a coupon for TGI Friday's or something for my trouble.
The press release says:
"...people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010. "
Voodoochild
02-16-10, 09:34
Back out of the contract if it isnt too late. Tell them you are no longer interested in purchasing the house.
VooDoo6Actual
02-16-10, 09:46
Sounds to me like somebody possibly breached their fiduciary duty of full disclosure & of course you can rescind your offer within the states' timeline statute...
You should have 7 days from FM for the inspection and back out. Just depends on how bad you want the house as the realtor WILL announce it now that you have uncovered it.
FM is not letting anyone know of this 3.5 other than listed on their website. Wifey is a realtor and their office was unaware.
Well, I don't want to back out. It's a good price for the house. I just feel like I was denied information during negotiation ... the outcome, agreeed price, etc. MAY have been different had I been provided all the info. Maybe not.
In the end, I am getting the house for $68,000 less than the original owners had it built for in mid-2007 so I think it's a good price. But still - it would have been nice to have known this to at least open up options.
I guess at this point I am just going to complain as far as I can go in Fannie Mae - obviously, I am not expecting any sore of compensation, but I'll be a PITA for whatever that is worth.
It's also VERY misleading - they make it sound like "negotiate your best price" and THEN receive the incentive. What their Realtor told me is that they would have raised the cost of the house to compensate, which is not much of an incentive at all (since you can always negotiate sell-paid closing costs anyway, even with Fannie Mae.) We elected to not do that - but if the incentive was REALLY an incentive, who wouldn't jump at it?
I was screwed by her sister Sallie.
I was screwed by her sister Sallie.
Well, at least you were not screwed by her brother, Freddie Mac! :D
Give the appearance of walking away (not saying I would really walk but make it look as if). If you have 7 days from date whatever to walk then play chicken. See what happens.
Agreed, I would play chicken. Then again since the .gov basically owns them now again, you might want to get on the squawk box to your congress critter and see what you can shake loose that way.
SW-Shooter
02-16-10, 15:19
You guys are priceless, screwed by Fannie, screwed her sister Sallie, but better than not being screwed by her brother Freddie. Funny stuff right there.
shakazulu12
02-16-10, 18:37
I hate to break this to you, but Fannie Mae, and any other seller of a property have always had this ability. Its simply a matter of you asking for it. They have no obligation to disclose this information to you.
Your realtor not advising you to ask for it is more the issue here than Fannie. I buy and sell foreclosure homes and shortsales for a living. Just like anyone else, Fannie is trying to maximize their proffit on the deal, giving away closing costs when the buyer didn't ask for them doesn't do that.
There is also the chance that they simply would have countered your offer to a higher price if you had asked for them. You never really know what the bottom line is with those guys, it just kinda depends on how long they have held the property and how much they are losing on the deal.
Give the appearance of walking away (not saying I would really walk but make it look as if). If you have 7 days from date whatever to walk then play chicken. See what happens.
We actually did go through several iterations trying to exploit the incentive ... however they called our bluff already.
I hate to break this to you, but Fannie Mae, and any other seller of a property have always had this ability. Its simply a matter of you asking for it. They have no obligation to disclose this information to you.
Your realtor not advising you to ask for it is more the issue here than Fannie. I buy and sell foreclosure homes and shortsales for a living. Just like anyone else, Fannie is trying to maximize their proffit on the deal, giving away closing costs when the buyer didn't ask for them doesn't do that.
There is also the chance that they simply would have countered your offer to a higher price if you had asked for them. You never really know what the bottom line is with those guys, it just kinda depends on how long they have held the property and how much they are losing on the deal.
Agreed...
Seller has been paying concessions for many, many years. Nothing new here, sometimes it's better to write a clean deal and get an original lower price, usually the "free' concession is built into the final sold price and financed for 30 years. No free lunch.
The Realtor should have explained this to you, if not, maybe it was their first day in the business?
I hate to break this to you, but Fannie Mae, and any other seller of a property have always had this ability. Its simply a matter of you asking for it. They have no obligation to disclose this information to you.
Your realtor not advising you to ask for it is more the issue here than Fannie. I buy and sell foreclosure homes and shortsales for a living. Just like anyone else, Fannie is trying to maximize their proffit on the deal, giving away closing costs when the buyer didn't ask for them doesn't do that.
There is also the chance that they simply would have countered your offer to a higher price if you had asked for them. You never really know what the bottom line is with those guys, it just kinda depends on how long they have held the property and how much they are losing on the deal.
Oh, I understand that. Fannie gives closing costs all the time. And, it's not like I didn't budget for closing costs.
What gets me is the way they are pitching the incentive ... 3.5% off your final sales prices towards closing costs or Whirlpool appliances. Your're right - the reality is they are not really giving you anything they couldn't have given you before - that is the financing of your closing costs. And, the reality is I'd probably be paying $9375 more for the property. But they certainly don't sell it that way in their press releases and on the HomePath site.
I still think that since they are offering the incentive, their realtor should have mentioned it. They mention all the other Fannie Mae incentives such as the financing, etc. Just not this one.
In reality - I think the FM's realtor just didn't know about the incentive. He should have. The realtors representing FM are SUPPOSED to be up on all this crap.
No...YOUR Realtor is supposed to be up to speed on all that crap. I might add this is elementary...Realtor 101
Preferred User
02-17-10, 08:22
This is an issue with your real estate agent/Realtor®. They could waive their commission or you could file a complaint with the Board of Realtors® or State licensing agency. The Principle Broker they work for has to carry Errors and Omissions insurance to cover just such screw-ups.
MarshallDodge
02-17-10, 09:08
Yep, screwed by Realtor Mae. ;)
To give the agent the benifet of the doubt.
Most of the time, the very best deal is where you DO NOT ask for the concessions and you write what's called in the industry a clean deal. Often times there are competing offers and the cleanest has the best chance of success. Buyer concessions can cause unpleasant appraisal issues, depending on the loan, each loan has it's own differing guidelines.
As you've found out, purchasing a home, especially an REO can be a daunting and complicated process and this may have been explained to you but was lost in the process?
MarshallDodge
02-17-10, 09:38
To give the agent the benifet of the doubt.
Most of the time, the very best deal is where you DO NOT ask for the concessions and you write what's called in the industry a clean deal. Often times there are competing offers and the cleanest has the best chance of success. Buyer concessions can cause unpleasant appraisal issues, depending on the loan, each loan has it's own differing guidelines.
As you've found out, purchasing a home, especially an REO can be a daunting and complicated process and this may have been explained to you but was lost in the process?
That is all fine and good but it should have been explained that way to the buyer.
Agreed...but so many times that conversation gets lost in the process, not saying it's the case, just a possibility?
What it really comes down to ultimately is that their incentive, as described by them, is very misleading. It really makes it sound like "negotiate you deal" THEN get 3.5% towards closing or applicances. Yes, eveyrthing comes down to a bottom line - but they make it sound like, and everyone I talked to that read the incentive description agreed, that it was a discount above and beyond what you'd normally be able to negotiate. In fact, it says "Buyers WILL receive". NO WHERE did it say it was a negotiating point.
It's misleading. They are really offering nothing.
Anwyay, it's all water under the bridge now. I am over it. Home inspeaction Friday.
Have to sell my current house, too - carrying two morgages untl then. :eek:
Ah, ok, I see where your coming from. The "rules" are changing so fast in the housing industry it's hard to keep up.
Anyway, good luck with the inspection, get a good inspector, you really need to know exactly what your buying. And best wishes on your sale.
Ah, ok, I see where your coming from. The "rules" are changing so fast in the housing industry it's hard to keep up.
Anyway, good luck with the inspection, get a good inspector, you really need to know exactly what your buying. And best wishes on your sale.
I am actually using the contractor that I have used for all my home renovations in the past. He's a home builder and does excellent work, and I trust his advice 100% rather than some stranger off the street.
The listing broker told me after they accepted my offer before I signed the contract if I wanted the 3% closing incentive. I would need to increase my offer by 3%. During negotiation process no information was given about the program until we agreed on a price, even though I kept asking about the program. They only asked my broker how I knew about the program; her response was I did research.
Is the 3 1/2 percent closing incentive advertised by Fannie Mae only a marketing scheme?
On Fannie Mae website (HomePath) they state to be eligible:
Special Offers
Closing Cost Assistance and Appliance Incentive for Fannie Mae Homes
Fannie Mae is offering a 3.5% incentive* for buyers who purchase and close on a Fannie Mae-owned home between January 28 and April 30, 2010. Buyers purchasing properties listed on this site that are closed within this period may receive up to 3.5% of the final sales price for:
• Closing costs;
• The purchase of new Whirlpool® appliances by Fannie Mae; or
• A mix of closing costs and appliances, at the buyer’s discretion, up to the maximum 3.5%.
To be eligible for this incentive:
• Offers must be accepted on or after January 28, 2010
• Property sales must close before May 1, 2010
• Buyers must be owner-occupants, investors are excluded
Contact a Fannie Mae listing broker for more information.
*Lenders may impose their own limitations on the use of the 3.5% incentive, so buyers should consult their lenders for guidance.
I feel Fannie Mae should have a disclaimer that negotiated price may make you ineligible for this promotion.
The listing broker told me after they accepted my offer before I signed the contract if I wanted the 3% closing incentive. I would need to increase my offer by 3%. During negotiation process no information was given about the program until we agreed on a price, even though I kept asking about the program. They only asked my broker how I knew about the program; her response was I did research.
Is the 3 1/2 percent closing incentive advertised by Fannie Mae only a marketing scheme?
Someone should sue under truth in advertising laws. That is not an "incentive". If you are directly paying for it it is not an incentive.
I work closely in Real Estate circles (no I'm not an agent) and I see a LOT of agents that are borderline incompetent. Its a huge field and hard to keep track of all the ins-n-outs. Sounds like your agent dropped the ball.
It's the same as any other group of "professionals" some know what they're doing and many of them don't.
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