Would Freddie Mac Rather Short Sale or Foreclose? You Be The Judge-An Actual Phoenix Short Sale Case
Ok, I'll make this short but sweet...
I'm handling a Phoenix short sale for a client. We've had the property listed since July 12, 2010. The seller tried to "do the right thing" by not simply walking away and conducting a short sale. In fact, during the listing period, he actually filed a claim with his insurance company to resolve some mold issues in his bathroom (again, he could have simply left this problem for Fannie to deal with).
We received an offer on 11/13/10 for $54,000, all cash. This was the ONLY offer we received in 5 months. Life was good, so we thought. I ran the comps, and determined the value to be around $52,000.
Aurora is servicing the loan, and ordered the BPO. Lo-and-behold, the BPO came in at $96,000. We disputed the BPO, and our request for a new one was granted. After the 2nd BPO, I received the following email on 2/8/11...
We submitted a reconciliation review to BPO Direct and the results returned on 1/21/2011 with a value of $75,000. At this point, Freddie Mac has reviewed the valuation data and has confirmed the value of $75,000.
I was so shocked and dismayed by this value, I actually wrote a blog post about it.
Knowing the property was going to auction on 3/21/11 (3 days from today), tonight I decided to see if the property had an opening bid for the auction.
Although not shocked, I was dismayed that the opening bid for the home will be $51,941.00. So, if someone comes along and bids $51,942, they get the home. The sad thing is, mark my words, this home will not sell at the auction. Freddie will take it back at the auction, and end up selling it for less than $50,000 as an REO. I'll report back the day after the auction to prove my point.
This, just 45 days after Freddie Mac told my Phoenix short sale client that they would only accept an offer of $75,000.
Folks, this is sick! Did you know that Freddie/Fannie is owned by the American taxpayers? Did you know that every time they foreclose on a property, they are "made whole" by us? Yep, that's right. If someone owes Fannie/Freddie $200,000 on a home, and they foreclose and net $50,000, we (you and I) pay them $150,000 (plus servicing fees) to make up the difference. Why should they work with homeowners when they have this type of arrangement?
So, the next time someone at Fannie/Freddie tells you they are looking out for homeowners, please remember this blog post.
Now, if you are as sick of this as I am, forward this post and/or re-blog it. If you are content with what is being done with OUR taxpayer $$, simply ignore it and find something more entertaining to read.
If we don't start pointing these cases out to others, we are assured that things will get much worse before they get better. Please, do your part and spread the word that things need to change. Write your congressman/senator. Call the local media outlets. Do whatever it takes to let others know what is really happening with our hard-earned dollars.
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Copyright © By Bob Hertzog 2011 *Would Freddie Mac Rather Short Sale or Foreclose? You Be The Judge-An Actual Phoenix Short Sale Case*