Fannie Mae to Speed Up Foreclosure/REO Inventory Sales
Posted by Benjamin Dona on Monday, January 11th, 2010 at 9:17pm.
According to a memo sent out to all its lenders and mortage servicers, Fannie Mae is going to modify the way it goes about the handling of selling its foreclosure/REO inventory effective immediately. In the announcement, Fannie says it will now accept purchase offers for this type of inventory immediately after listing, without notifying lenders or mortgage servicers whose loan files are under review. Under its previous policy, Fannie gave lenders and servicers fifteen days to find a better purchase offer for new REO they sent to the company following foreclosure.
Apparently, Fannie Mae has finally recognized its foreclosure/REO inventory, which has ballooned to over 72,000 unsold homes, is not moving to the market quickly enough. In addition, they appear to have realized that the concept of using the fifteen day time out period as a way to obtain the original loan file for review in the hopes of exposing potential errors in underwriting or servicing guidlines was slowing down the sales process.
The memo has made it quite clear that they plan to move these properties to the market as soon as they have established a current value. And, if they sell the property for a loss and the loan file review turns up any problems, the lender or servicer will still be liable for loss.
Their hope is this new move will open up earlier access to their foreclosure/REO portfolio, speed up the selling decision making process and offer some interesting opportunities for home buyers and their agents.
Only time will tell if this action will make a difference for foreclosure sales in 2010. Let's hope for everyone's sake, it does.
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