Fannie Mae: New REO Rules

November 4, 2009 · 12 comments

There are plenty of rules and regulations in real estate that make being an investor difficult…unfortunately, as of a couple weeks ago, there’s now one more…

It’s been several weeks since we submitted any offers, but as I mentioned the other day, we are in the process of going after about a half-dozen houses this week. Two of the offers that we submitted were on REO properties owned by Fannie Mae (the large mortgage lender). On both of these properties, we received calls from the agent saying that Fannie Mae was not yet accepting offers from investors.

After a bit more research, here’s what I found out about this new “First Look” program that Fannie Mae is instituting (this is directly from Fannie Mae literature):

“During the first 15 days a property is listed for sale, only offers from owner-occupants, public entities or their designated partners will be considered. Offers from investors can be submitted, but they won’t be considered until after the initial 15 days.”

Here is a bit more info from Fannie Mae…

12 responses to “Fannie Mae: New REO Rules”

  1. Kevin M says:

    I think their getting carried away, making it harder and harder for investors.Maybe if their real estate sits on the market for a year or so they’ll start to change their tune and realize this economy needs investors now more than ever.

  2. Nathan says:

    There are so many reasons why that is so wrong, I don’t know where to start… I assume they are doing this so Home Owners have a better chance of getting these houses… I guess Fannie Mae is ok with Joe Schmoe buying a mold infested, water damaged, leaky roof dump as opposed to an invester totally remodeling and selling a beautiful home at a fair market price… It’s not like we are raising home values, bettering neighborhoods and helping first-time homebuyers or anything like that…

  3. Chris Ranney says:

    Nice to see you taking Massive Action ! Bid on 6. 1 will come through. Go brother.

  4. Sounds like they are taking a note from how HUD properties accept bids

  5. Alex says:

    I’ve been following some HUD properties in my area (and in other areas). 99.99% of them go to investors after the 14 day “owner occupant” period.

    I don’t think this is a very big deal for investors…

  6. Luis says:

    I agree. This is typical for HUD properties and the majority of the time they go way past the 14 day period very few get snapped up in those first 14 days.

  7. Kevin M says:

    I have found that most hud homes that are great deals are almost always taken by owner occupants in the ten day period.If they are not its because they need too much work and investors usually wait until price reduces to a point it makes sense to buy .I think investors will lose out on quite a few deals by having too wait on the 14 day period.It just makes it that much harder

  8. Alex says:

    Just wondering–do you know if Freddie Mac adopted the same policy?

  9. J Scott says:

    Alex –

    As far as I know, Freddie Mac has NOT implemented this same policy…that said, I have never purchased a property from Freddie, so I don’t know for certain…

  10. Interesting… this is a lot like how HUD does things…

  11. H Benoit says:

    I am looking at putting an offer on one of Fannie’s foreclosures. I thought I read somewhere that you have to hold onto it for 90 days before you can flip it but I can’t seem to find that info now. Does anyone know if that is Fannie or not with that regulation?

  12. J Scott says:

    H Benoit –

    Yes, with FNMA REOs you’ll be required to hold the property for at least 90 days before you can resell. You can get it under contract within the 90 days, but you can’t actually transfer title until day 91.

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