Fannie Mae foreclosure question

Foreclosures, Short Sales, Tax Foreclosures
1

I came across a property today that is listed as a fannie mae property in the MLS. I looked at the details in the listing and it seems that fannie just purchased this house at the courthouse on 7-15-11 for over 100k and it is listed today, less that 2 weeks later, selling at 39,900. wtf? Why is fannie bidding at a foreclosure auction in the first place, and second why are they paying twice FMV for properties? Then selling them at a fraction of what they just paid.

This makes no sense to me so I must be missing something. Someone please help me understand why anyone would do that. I found a similar property where GMAC did the same type of transaction. What am I not seeing or understanding here? Thanks!

http://www.snlcraftsncollectables.com/fannie.jpg

2

Hi,

 The answer is that the original mortgage balance was $100k, there were no bidders at the courthouse step auction so the bank (Lender) must (by default) take the property back for what was owed, $100k ($100,000.00 US Dollars, One Hundred Thousand US Dollars).

Because the market has lost over 50% here in Phoenix, the current BPO on the property “AS IS” is $39,900, this does not mean that this is FMV as FMV / ARV may be 59,000 however the home may need carpet, paint, tile, cabinetry, etc.

The bank (Lender) is selling based on current evaluation, you would have to run comps to know what this property is worth and you would need to accurately estimate repairs to know what rehab / remodeling / lipstick and ruge may cost!

                  GR
3

Fannie has thousands of properties in a similar state. They will spend millions just to maintain these foreclosures, and I’m sure they are looking to unload them as soon as possible.

4

Fannie Mae and other mortgage lenders are purchasing properties at above FMV and selling them for FMV in order to write off the losses on their balance sheets. They are able to take the losses from the sale of bank-owned properties and use it to decrease their overall tax liability. In essence they are offsetting gains made in other investments with losses made on real estate investments.