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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] A new wrinkle... Posted by CC in OC on June 08, 2009 at 10:26 PM ...in the short sale sector that may spill over to Fannie/Freddie owned REOs. I just read this on another board. The post was dated May 31. [quote] The latest approval and release documents from Fannie stated a condition that prohibits a second transaction on the same property for 30 days. I have a friend at Freddie in upper management who stated that Freddie is moving to follow suit. Since the government now owns those entities, it's the current administration that's trying to stop double closings. However, our government often does things without thinking through the ramifications. The bailouts actually encouraged less approvals for short sales and more foreclosures. Now they've been trying to reverse this effect. Since Fannie/Freddie own about 65% of this country's loans, what they do will affect the entire system. The reason they're trying to stop double closings is they believe that investors are making money at their expense. That certainly is true, but investors are also mitigating their losses. Government entities just don't like individuals making money that they think should be theirs. However, there's a legal issue involved with this prohibition. Title companies may refuse to close with this condition, or they may just ignore the condition and close on the second sale anyway. If you use another title company, they wouldn't be aware of the prohibition. A problem could arise if you do a double closing. If you violate the prohibition, AND if the lender has accepted the wire transfer so that the transaction is complete AS TO THE SHORTING LENDER, what's the effect of the lender REVOKING their approval? This is what we'll be watching. They may not be able to legally revoke their approval. They may not have a valid lawsuit against the parties, notwithstanding the breach of that one element. They may not really have any damages. They could actually create a legal liability for themselves by prohibiting the second closing. [quote] Stay tuned... Follow Ups: Re: A new wrinkle... Rob 4:39 PM, 06/09/09 (1) Fannie Mae Site CC in OC 6:40 PM, 06/09/09 (0) Post a Followup: Name : E-Mail : Subject : Comments: : ...in the short sale sector that may spill over to Fannie/Freddie owned REOs. : I just read this on another board. The post was dated May 31. : [quote] The latest approval and release documents from Fannie stated a condition : that prohibits a second transaction on the same property for 30 days. I have a : friend at Freddie in upper management who stated that Freddie is moving to follow : suit. Since the government now owns those entities, it's the current administration : that's trying to stop double closings. However, our government often does things : without thinking through the ramifications. The bailouts actually encouraged less : approvals for short sales and more foreclosures. Now they've been trying to reverse : this effect. : Since Fannie/Freddie own about 65% of this country's loans, what they do will affect : the entire system. The reason they're trying to stop double closings is they believe : that investors are making money at their expense. That certainly is true, but : investors are also mitigating their losses. Government entities just don't like : individuals making money that they think should be theirs. : However, there's a legal issue involved with this prohibition. Title companies may : refuse to close with this condition, or they may just ignore the condition and close : on the second sale anyway. If you use another title company, they wouldn't be : aware of the prohibition. : A problem could arise if you do a double closing. If you violate the prohibition, AND : if the lender has accepted the wire transfer so that the transaction is complete AS : TO THE SHORTING LENDER, what's the effect of the lender REVOKING their approval? : This is what we'll be watching. They may not be able to legally revoke their : approval. They may not have a valid lawsuit against the parties, notwithstanding : the breach of that one element. They may not really have any damages. They could : actually create a legal liability for themselves by prohibiting the second closing. : [quote] : Stay tuned... : [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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