Fannie Mae-1 year ownership requirement

[Mary M.]

Hello Everyone!

I am placing a offer on a Fannie Mae REO, offering a 5 day close and all paying all cash. Has anyone come across the stipulation of investors having to wait 14 days until our offers will be reviewed, while offers that are placed by those who are going to be owner occupied having first dibs (and not having to wait the 14 days)? My realtor stays It states that if I were to submit my offer as an owner-occupy and break the agreement, I would have to pay 'damages' of $5,000. Also, I would not be able to resale for that same 12 month period!? Can they really enforce this? Any experience with this? It surprised me on many levels because I would assume the banks would want to unload their REOs quickly instead of waiting on a homeowner who may have a financing contingency.

[Michael Murphy]

I was just reading today about CoreLogic's covenant monitoring services.

Basically they will track any loan applications on the property for one year and notify both lenders.

The new buyer probably won't be able to get a loan on teh property. And odds are (about 80%) that Fannie owns your loan. They could pull the note as having been obtained through fraud (lying about being an owner occupant.)

Not worth the risk!

"Enforce Contractual Holding-Period Clauses

Increasingly, lenders are including holding-period clauses in purchasing contracts to protect against flipping. While such clauses discourage honest investors from buying properties with the intention of flipping, they do not stop fraud perpetrators and are difficult to enforce. Short Sale Monitoring Solution continues monitoring properties sold through short sale, sending immediate alerts when a short sale property is being resold"

http://www.corelogic.com/Products/Short-Sale-Monitoring-Solution.aspx

"REOWatchâ„¢ monitors post-sale activity to help you continually evaluate and optimize pricing strategies and limit flipping. As with Short Sale Monitoring, REOWatch also helps you to enforce contractual holding clauses, analyze REO performance, maximize pricing, reduce losses and blacklist fraud perpetrators."

http://www.corelogic.com/flip/?WT.mc_id=12312010-MREO-EB_mreo_wb_reo_1_101231