When a bank forecloses on a loan and takes back the property, the property is known as Real Estate Owned, or REO. Fannie Mae is not happy with the amount of time it takes to sell an REO. In the past, if an offer came in on a home insured by Fannie Mae and there was a question as to whether or not the loan met Fannie's requirements, the loan servicer had 15 days to have the file reviewed. If there was a problem, the servicer could look for a better offer or buy it themselves.
This meant the buyer was in limbo for a couple of weeks. Will my offer be accepted? Will the servicer buy it? Will the price go up? Bottom line - it slowed the process and many deals were lost.
Now Fannie Mae has adopted a new policy. In an effort to speed up the sale of REO's, Fannie will now accept offers without notifying the servicer first. If it turns out that the loan did not meet Fannie's requirements, the loan servicers may be required to reimburse Fannie Mae for any loss.
“When Fannie Mae receives an offer to purchase a property that is also subject to an underwriting or servicing review, Fannie Mae may accept the purchase offer without first notifying the servicer, whether or not a final decision has been reached with respect to the review,” Fannie Mae said in its announcement. “If, after completion of the review, Fannie Mae determines that the mortgage loan did not meet its eligibility or underwriting requirements and Fannie Mae has incurred a loss by selling the property, the lender will be required to fully reimburse Fannie Mae for its loss.”
What does this mean for you? If you're in the market for an REO, your deal may close more quickly. In addition, this should help get the glut of REO's sold, thus stabilizing the real estate market.
No comments:
Post a Comment