Fannie Mae - Whats The Deal Here?
I discovered a home about a month ago in prime Pgh real estate. Looked at the house before it was even on all the foreclosure sites. House needs about $75K of serious work before you could even start the cosmetic stuff. (It's listed at 195K, FMV about 225K - leaky flat roof, leaky bubble lights, horrible water damage through three floors, black mold, rotting joists, etc.) The county lists all the RE tax assessments with previous buyers and previous sale www.prices.This house was purchased (in a divorce settlement, I think) for 214K in 1997. The owner defaulted and as of 12-18-03, became owned by Fannie Mae. NOW, the county website lists all the previous owners for like, the past twenty years. I go to check this property tonight, just for giggles, and not only is the $214K purchase price and previous owner now gone, I see that Fannie Mae purchased it for $12K. Drove past the house tonight, there isnt even a for sale sign in front. My questions are 1) If Fannie Mae bought the property for 12K, did they cash out GE Cap (the original mortgage) for pennies on the dollar and then "buy it" for 12K on the courthouse steps? 2) If that is how it works, if I present building inspector / contractor figures and true as is appraisal figures plus really bad pictures of all the nasties, and then go direct to their Philly office, do I have a shot at acquiring this property at $110? 3) It is not under contract, why isn't there a For Sale sign out front? 4) Should I not waste my time? Perplexed, Lisa
Giggles,
I have noticed that all foreclosed properties in the Pgh. area are bought by the bank at a very ridiculous price. If this has happened that fast (since 102/2003) I would have to say they haven't had time to go into the house yet. Usually they will winterize all plumbing, windows, sinks, toilets, Ect. You can still bid on the property, just call your real estate agent. Since you are saying Philly, I'm guessing "Fedderman " must be in charge of title for the bank.
I would not go directly to them, I prefer to have all my work done by someone I know.
I usually bid 90% of whatever the bank is asking, as long as I feel the purchase is worth it. So yes you could get a 214K house for 110K !!!!!!!!!!!!
Good Luck
Lori
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Giggles -
Likely that Fannie Mae did not give the bank
a 'dime on the dollar' bid to get the place.
They just big the minimum amount to get
their property back. Have you been to
Sheriff auctions in PA? I've been to sheriff
sales in Allegheny, Westmoreland, Butler
as well as some in NJ. Typically the first bidder
is the county tax assesor - (bidding to recoup
the past due taxes). I'm guessing on this
prpoerty, the past dues taxes were close to
the 12k figure (the owners were in the place
since 1997 - 7 years ago - figure they may not
have paid taxes for past 3-4 years - taxes on
a 200k place are 3-4k (probably closer to 4k
in Allegheny). 4k x 3 past due years = 12k
property office bid.
Once the tax office finished their bid, the
mortgage holder (fannie mae) big $1 above
that to get the property back. That's why it
appears to have been sold for so low.
Nobody else must have bid on this place,
so it went back to the lender for the 12k.
Why didn't the lender bid a higher amount?
Because, the lender gets hit with a 2% fee
from the Sheriff's office for selling it - the
2% is based on the sale price. The lender
wants to pay as small a fee as possible, so they just bid $1 over the past bidder - in
this case $1 more than the tax office.
Federman or whoever the attny was is now
out of the loop (sort of). They completed the
foreclosure. I'd contact the lender directly
instead of Federman to see what price you
can get it at. They'll want to cover what is
owed to them (judgement amount). But,
get it before it' gets listed on MLS, as the
competition will come out of the woodwork
once it gets put on MLS and the price the
lender wants will be 6-7% higher to cover
the real estate commission. :-o :-o
I'd contact the lender directly
instead of Federman to see what price you
can get it at. ------> Does lender, in this case, mean GE Capital, the mortgage holder? Or Fannie Mae? Is Fannie Mae more like an agent in this case, and the 12K paid at auction PLUS what GE wants is more like the true figure? Doing some math, at least $90K has been paid in P&I since the mortgage was taken out. Can that also be figured in to discount it? (Gosh, this stuff seems more elusive to me than the secret ceremonies of the Bavarian Illuminati, Freemasons or Skull & Bones society!)
On all of the properties I've purchased in Pgh, once the bank took possession, I called my Real Estate Agent for the following reasons:
1) Pgh has a good neighbor program set up with the banks. Most of the time those houses never go to the public auction.
2) My real Estate Agent can find all of the information faster than I can. (Even though I've been in financing for over 15+ years)
3) Federman would be the selller's attormey. You would have no reason to contact them unless your offer was accepted and most of the time they don't take private calls. (They will tell you to go through your agent
I would bet that the deed will be signed by Rodiguiz, the Attorney for Hud.
5) IFannie Mae would not be the agent, they usually assign someone to do that
6) Call your agent before everyone else notices your find. You might be able to get a bid in first and close quickly. Most "nice" houses in Pgh get to be first choice by Police, Fiireman, Teachers, Ect. That is one reason why they don't have a public auction all the time
Good Luck
Lori
[addsig]
Hi, I am new in the foreclosure area. I live in pittsburgh.
anybody know how do i find the properties before they hit MLS?
thank you
Hi Lori,
Because of the condition, I wouldn't even think of making an offer anywhere close to asking. I read on here (somewhere) about putting all the info together to justify a low offer price that would get consideration - pictures, contractor's estimate, as is appraisal, etc. Once I get all my figures in order, will be putting in an "official" offer through the proper channels (don't want to hand over any hand money to let sit for weeks on end till I absolutely have to). However, when they come back with a counter that's unrealistic, I have all my ducks in order to justify the low offer. I don't figure the selling agent would "go to bat" for me to explain *why* the offer is so low to the seller. That's when I may go directly to them. Chances are, as you mentioned, the seller has no clue as to the condition of the house.
I am working with an agent, it's how I got into the house in the first place
Lisa,
You don't have to bid the asking price. Bid what you want and see what they say. I bought a house for $11,500.00 in 2001. It was listed at $30K. I put the bid in as a joke. I won.
Lori
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hi, I guess nobody is going to answer my questions!
when you guyes talk about making an offer, i had one bad experience. I called a agent a couple weeks ago about a bank owned house for sale in my area, the agent basically told me "if you want to buy a cheap house, this is not the one for you" :-x , i was like "what" i haven't made an offer yet, i haven't even looked at the inside of the house yet! What are these about? So what would you do when this happens to you?
Sally
Hi Sally, I use one of the many fee-based websites out there for foreclosures, although the info can be outdated. . .you can also go to Fannie Maes site directly. I, too, have dealt with some persnickety agents (on the seller side). . .*my* agent is a doll and very helpful!
thank you Giggles! How is situation with the house you were talking about? any luck?
Does anybody know the ball park for installing a brand new furnace and water tank? Just a ball park would be very helpful?
and also how about burst pipes? giggles, you said the house you were looking were leaky, is that because of roofing or burst pipes? how much do you estimate for plumber to fix the pipes?
Does anybody know the ball park for installing a brand new furnace and water tank? Just a ball park would be very helpful?
and also how about burst pipes? giggles, you said the house you were looking were leaky, is that because of roofing or burst pipes? how much do you estimate for plumber to fix the pipes?
Every situation is different. If you live in Pgh, I use Restano for heating and air conditioning. As far as plumbing goes, my plumber just died last month so I am in the process of interviewing new plumbers.
Lori
[addsig]
you said the house you were looking were leaky, is that because of roofing or burst pipes?
__________________
no, leaks are from the roof and bubble lights (poufy skylights on steroids.)
Just got a call this afternoon after hunting the listing agent for 2 1/2 days (like, we were having to BEG for the grand opportunity to put a bid in on this house) that the house in officially under contract as of yesterday. . .she could have made mention of this fact before I wasted $$ and peoples' time doing inspections, appraisals and getting my lender on board. One return phone call to my agent is all it would have taken. My agent called her office, I called her office, I was about ready to call Fannie Mae directly because she never called us back and I have everything I need to close the deal within 7 days. Just as I got FNMA's number, my agent called to tell me the listing agent *finally* called her back and the house is under contract.
Lesson learned: This agent's lack of good business conduct seems to be the norm. If I treated my car customers like this, I'd be out of business real fast. I am used to conducting business in a certain manner and expect the same in return. Right now, my attitude towards real estate agents in general (and not my own, thank you) is that they are WORSE than sleazy used car salesmen.
</rant>
Hopefully the deal will fall through (evil grin)
hi, gigles, thank you for your update and sorry to hear that the house you're interested is under contract. Like the message i posted before that i have dealt with really bad agent, very unprofessional agent.
The house i was looking at was wet in the basement where laundy/furnace area. i don't think it is roof problem. because i don't see any water on the second floor ceiling. I thought it is because the pipe burst in the water but i am not all sure. People on this forum say it could be gutter, grading unproperly all kinds of stuff. so i don't know i don't have any professional inspector or plumber inpect the house. I don't know any good plumber in south hill area. anybody know any good plumber, inspection or General contractor that i can use, i can pay them to go see the house, i just don't know how to do this, such as how much would they ask for seeing the house?
Sally