Fannie Mae Homepath Property

[Lennie Holland]

Looking through MLS and found this. I'm not interested in the property I just didn't know a bank would fix and flip a property, if that's what this is?

Zillow and here it is at Homepath

It's obvious that someone rehabbed this property, I just don't know why it was foreclosed in August and now it's a Fannie Mae Homepath property?

Didn't know if this was a exit strategy for any future flips?

Forgive me, I'm still learning but could someone explain this one to me.

Thank you.

[Account Closed]

Originally posted by @Lennie Holland:

Originally posted by @Account Closed:

Originally posted by @Lennie Holland:

Thanks Wayne, I guess I didn't realise they buy them back. Thanks again everyone

They don't actually buy them back intentionally (most of the time). If the property has no bidders, for whatever reason (min. bid too high, other title or lien issues, etc.), the property goes back to the bank. Then they are the new owners and have to arrange for the resale. They sell many as-is, but also do mini-rehabs in order to sell to owner occupant buyers....getting FHA loans requiring a minimum standard of condition (paint, flooring, appliances, etc).

 Thank you for that, I was still confused on why this was happening. I may still be confused on why someone picks certain properties to get into minimum standard condition. 

I may not be correct here but if some number cruncher sees this property as worth a rehab to get to minimum standard for FHA, then that means a REI in that area has missed out on a good deal.

Would that be a fair assessment?

Not necessarily.  We are not privy to the lender/number cruncher motivation or plan nor their entire loss.  Some loans are insured and the lender is reimbursed a certain percentage.  Some lenders do not drop minimum bids as a matter of policy so will most often get over encumbered properties back. A whole host of reasons why they got it back and why they chose to rehab and sell as opposed to sell it as is.  Check the loan amount and the opening bid for the property you were researching.  I'm willing to bet the lender got it back because they did not reduce the starting bid. So even if they got it back at sale, rehabbed and sold for $175K they may have lost money if they loaned $200K on it.