10-19-2011 10:15 AM
How does a Mortgage Insurance Company affect a Foreclosure?
I placed a bid of $250,000 on a Fannie Mae Foreclosure and received a verbal approval.
Then just received an update from my real estate agent:
"I just heard back from the Listing Agent. The Asset Manager signed off on your offer, Fannie Mae went and signed off on it but the Mortgage Insurance Company will not.
They said the house is worth way more than that. They had in apprasial done which showed a value of 345,000"
The Redfin history shows it was initial listed after Foreclosure of $345,000 and over six months of no offers dropped to $299,000. My research show alot of Foreclosures are near their 2000 selling price and this house was sold in 1999 for $215,000.
10-19-2011 11:26 AM
I closed on a Fannie Mae house in June and we didn't have any problems. We actually didn't need an appraisal because we used the HomePath program. No appraisal and no PMI, therefore no mortgage insurance. We did end up with a slightly higher interest rate due to the program, but not significantly higher to warrant doing an FHA or conventional.
Any chance you can change mortgage insurers? I don't see why they would have a problem when the sale of the house is less than the appraisal...only think it would be a problem if it was more.
10-19-2011 12:18 PM
There is no problem with the HomePath loan.
The issue is with the insurance company Fannie Mae used to cover the loan of the previous owner.
10-19-2011 05:29 PM
propose getting an independent appraisal and see if they agree. You can then show the appraiser the listing history and they can compare the house to other comps.
10-19-2011 05:30 PM
Where are you seeing homes at 2000 level prices? The homes in Seattle that I've been watching are selling at late 2004, early 2005 level prices.
10-19-2011 10:09 PM
Something is weird. Why would the mortgage insurance company have something to say after foreclosure? I'm not doubting it, just don't understand what it is. I've not seen this to be an issue on REOs. Our Fannie Mae REO did not have this problem.
Is this a foreclosure (REO) or a deed in lieu?
10-20-2011 12:38 PM
The Private Mortgage Ins company would need to "sign off" since they too have a vested interest in your scenario
Since they are looking at a substantial loss based on numbers you provided it does not suprise me
Your Realtor could negotiate on your behalf with the PMI company
10-20-2011 06:54 PM
The house was foreclosed in May. I took the tax ID from the Redfin page and check the Assessors sales page and it shows the owner as "FEDERAL NATIONAL MORTGAGE ASSOCIATION".