All Forum Posts by: Julia Dugger

I think they're steering you correctly - in addition to the fact that you'll likely have serious competition and can't purchase during the First Look period, HomePath properties also have a deed restriction that limit any sales to after 90 days or less than 120% of sale price.

I'm curious about something - you call this a wholesale deal but what you're discussing sounds like a traditional REO purchase with Fannie Mae HomePath with the listing agent doing both sides of the transaction. Am I understanding this correctly?

Fannie Mae has a vested interest in selling to owner occupants so there are times where they will either invest in the property up front (pre-list) OR invest in the property for owner occupants with some financing contingencies. Keep in mind that values are relative and highly personal numbers -- while that price may not be something you would pay, many others might. 

All offers must be placed through the Online Offer system on HomePath by a licensed professional real estate agent -- Fannie Mae won't accept anything else. The FirstLook period is intended for owner occupants -- Fannie Mae will not consider investor offers during that period -- but they're also not at all likely to accept anything significantly bellow list. As I've explained in other strings, most HomePath properties have multiple offers at the get go so I generally would not expect that they'll consider an offer more than a few percentage points off list and I would always expect a counter. Once a property has been listed for a while (like 60-90 days), they may consider lower offers but early in the listing period it's never going to happen (in my opinion)

Nicaolas' advice is good - HomePath titles are generally clean without any remaining liens so that shouldn't be a concern. You can offer whatever you think value is, as is, but be aware that HomePath properties typically receive multiple offers and that Fannie Mae will take highest and best - and that they will wait out getting close to asking prices. 

The foreclosure amount and the listing prices are not at all related -- Fannie Mae (and most other sellers) list properties at market price and those prices are actually set by Fannie Mae, not the listing agent. It is Fannie Mae who determines what offer will be accepted and the Fannie Mae asset manager who makes that decision has their performance rating determined by how close to the listing price that asset sells. So, while you can place an offer for whatever price you like and/or value the property, there is a slim likelihood that it will be accepted, even as an owner occupant. Also, it's important to recognize that Fannie Mae has already taken a loss on the property -- someone's mortgage wasn't paid, leaving a debt to Fannie Mae that is higher than the price the asset sold for at foreclosure sale.

The ability to submit an offer during the FirstLook period is dependent on your being an owner occupant for at least a year - it's unrelated to financing, it's a Fannie Mae HomePath requirement as the  current owner of the house. And, given the level of interest in properties, people are turned in for First Look violations all the time (particularly people who lost in the bidding for one reason or another) and Fannie Mae does prosecute. There's no ability to negotiate the First Look owner occupancy aspect of the offer.

However, if you're purchasing a property as an owner occupant, you may be able to find someone selling Fannie Mae's new HomeReady product (maybe under a different name -- I know Wells is doing them). It also has 3% down and revokable MI. Will work out better for most people then FHA if you're keeping the house for 5+ years.

Fannie Mae discontinued HomePath Mortgage and HomePath Renovation Mortgage 2 years ago -- those financing products no longer exist.

So, something to keep in mind when considering offers is that asset managers are considered successful by their employers when they sell a property quickly at or above value. Of course, those both those things aren't always possible which is why you'll sometimes see price reductions at regularly scheduled intervals but that is somewhat dependent on the number of previous offers, showing history, repairs, etc. It is not at all true that Fannie Mae doesn't sell to investors -- a very significant chunk of properties are sold to investors -- but it is true that they have a preference for owner occupants. So, if two offers are equally good, the owner occ will generally win. And, of course, the FirstLook period supports this preference as well. But, regardless of whether you are an owner occupant or an investor, if you're not helping the asset manager get close to the numbers he or she needs to hit, it's tough to have a property offer accepted. So while it's absolutely possible to get a "deal" from Fannie Mae, you'll almost never get a "steal".