THE LAW OFFICE of DOMINIC SILVESTRI, PLLC


FANNIE MAE HOME BUY-BACK PROGRAM ALLOWS HOMEOWNERS TO BUY THEIR FORECLOSED HOMES BACK

FANNIE MAE HOME BUY-BACK PROGRAM ALLOWS HOMEOWNERS TO BUY THEIR FORECLOSED HOME BACK

During the last 7 years, many of my clients, whose homes were underwater and were going through foreclosure, often asked: “why can’t I just buy my home back for current market value?” This was a legitimate question as many times the lenders (or their respective investor/backers) would simply sell the home for the current market value after foreclosing on it.  To be honest, I posed that question numerous times to nearly every  lender. Unfortunately, the response was the same: “We just don’t do that.” What????? Why Not???

Times have changed.

Late last year, The Federal Housing Finance Agency (FHFA, the agency that oversees Fannie and Freddie) directed Fannie Mae and Freddie Mac to alter one of their policies relating to the sale of real estate owned (REO) properties in their current inventory. Under the new policy change, former homeowners who lost their home and who are able to repurchase their home – or a third-party able to purchase on their behalf – may do so at the fair-market value.

In the past, the homeowner could only repurchase the home for the full loan value.  This was often pointless – especially if the full loan balance was much higher than the home’s fair market value (i.e., the home was underwater). This new policy means that a homeowner does not have to pay the full loan value, but only the current fair market value. This is definitely a move in the right direction – especially if the lenders were going to forgive the deficiency between the loan balance and the fair market value. This may also give families a chance to stay in their home.

But wait, there is a catch: If your home was foreclosed upon, it must still be in Fannie’s or Freddie’s real estate inventory portfolio in order for this program to have any effect. If its been sold by Fannie or Freddie, you’re out of luck. sorry.

At first I was skeptical. However, just recently, my firm was able to successfully secure a home re-purchase for one of my clients.  To be perfectly honest, I don’t think Fannie Mae has fully implemented this program as of the date of this writing. Not surprisingly, I say this because no one could provide me with any guidelines, rules or directives as to how anyone is to be evaluated for this program.

If nothing else, at least homeowners have an option. Good luck!

 


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