Fannie Mae Tightening Up
September 20, 2007
A few months ago, a Realtor calls me up about a property that I should take a peek at. I’ll not go into the details of the deal itself, but I decided to make an offer on the property. The house was a Fannie Mae foreclosure. So, we write up the contract as usual and submitted the offer to the listing agent. The next day my agent calls me to inform me that before my offer is submitted, I’d have to sign off on some new addendums.
OK…
Apparently, Fannie Mae is trying to crack down on some of the fraudulent flippers.
So, the addendum was a deed restriction that would prevent the buyer from selling the property within a 90-day period from the closing date. This restriction would be placed in the deed, therefore there’s no way around it.
I was pretty surprised by this, but go figure.
Heck, instead of enforcing the laws we already have to cut down on mortgage fraud and illegal flips, let’s create some new ones!
Now, for those of you that are wholesalers, this hurts in a major way because the first 90 days are make it or break it, so consider offering less to figure in your holding costs.
Gotta go meet a seller and send a short sale offer,
Talk soon
Derek Pierce
Hi Derek,
You’re lucky - you are buying when they have lowered the requirement. When I bought my fannie mae last April there was a 6-month restriction. It all worked out for me because it was my first major rehab, and so it took me a bit longer to figure out what to do. I got really lucky, and had a buyer ready to close as soon as the time was up.
Just think… rent to own !!
Good luck!