So how will this FNMA auction work for “small investors?”

[Coronita]

http://www.bloomberg.com/news/articles/2015-04-02/fannie-mae-to-begin-auctioning-defaulted-home-loans-to-investors?cmpid=yhoo

“FHFA will require prospective investors to prove they’ve retained a loan servicer with a track record of handling delinquent debt, the agency said in a March 2 statement. Servicers also will have to offer aid to avoid foreclosures as a condition of sale.”

What does this mean for “small investor(s)?”

[The-Shoveler]

Yea, don’t think I want to be within a hundred miles of that LOL.

But maybe someone else here has some experience with this type of thing (sounds complex and costly).

[spdrun]

They’re essentially selling the debt to other banks which will either modify the loans, negotiate short sales, or foreclose, same as FNMA is doing itself. For small investors looking to buy properties, no difference, except that the properties that were foreclosed will end up on the new loan owner’s sites instead of on Homepath.com.

In order to gain a rentable property, this will involve going through the entire pre-foreclosure and foreclosure process. Better to buy an REO, short sale, or sheriff’s sale after someone else has gone through the legwork.

[bearishgurl]

[quote=spdrun]They’re essentially selling the debt to other banks which will either modify the loans, negotiate short sales, or foreclose, same as FNMA is doing itself. For small investors looking to buy properties, no difference, except that the properties that were foreclosed will end up on the new loan owner’s sites instead of on Homepath.com.

In order to gain a rentable property, this will involve going through the entire pre-foreclosure and foreclosure process. Better to buy an REO, short sale, or sheriff’s sale after someone else has gone through the legwork.[/quote]

The article is pretty vague as to “why?”

I don’t understand why FNMA hasn’t foreclosed on ALL these deadbeats by now and haven’t/aren’t marketing these properties on their homepath website. They’ve been pretty successful dumping properties from all over the nation on Homepath.

I’ve seen at least a dozen FNMA assignments recorded by various lenders since the new year in my “local research.” Two I know for a fact were mods, taken from previous years which could easily be failed mods by now.

Why wouldn’t FNMA just foreclose on their servicers’ failed mods? The homedebtors taking out these mods were just “buying time” to reserve the opportunity for more months in the future to “squat.” They never intended to adhere to the terms of the mod. It’s a joke and “working with delinquent home `owners'” is also a joke on the taxpayers.

Has FNMA not yet learned anything from this debacle of epic proportions?

I don’t believe the any of the moratoriums were extended into 2015 in CA so we should be back to the 111-121 day non-judicial foreclosure process.

What gives?

spdrun??

[spdrun]

Part of it might be FNMA wanting to appear like the good guys and disclaiming responsibility for the foreclosures that will happen.

[bearishgurl]

Why would a small investor be interested in this?

It’s like buying a vehicle at a US Customs auction from a collection that has been gathering dust on a vacant dirt lot for up to TWO YEARS and none of them have even been driven since they were “detained” in secondary.

A prospective vehicle buyer has 3 hours before the auction to line up single-file through the lot with all the hoods raised and take a look underneath. He/she can’t get under the vehicles or between them (they’re parked side mirror to side mirror) or even look inside the vehicles except through the windshields of “wing windows” at an angle. Often the tires have been taken off by customs to search inside for contraband, then confiscated and the vehicle replaced with bald tires and/or retreads. They can’t look in the trunk and can’t possibly drive it. The dash may have been crowbared by Customs in secondary or by thieves who got into the govm’t lot during the months/years the vehicle was stored there. The reason those vehicles are there in the first place is because the owners couldn’t afford to get them out of secondary storage in the first place after they were detained and searched. Does anybody think these owners could afford to maintain them properly while they owned and drove them??

The last time I attended one of these auctions, opening bids were $200 – $700 and the new buyer had to secure a new license plate from the DMV (extra fee). Many of these vehicles also turned out to have salvaged titles, as well and a bidder couldn’t examine any vehicle documentation before the auction.

It’s the same scenario with these loans, people. Will these TD’s have an opening bids of pennies on the dollar? These properties FNMA now wants to “auction off” or “dump” on Joe Schmuck Investor have the most recalcitrant hard-core squatters living in them who have likely been “working the system” for 3-6 years! And “the system” made them who they are!

When Joe Schmuck Investor (the “winning bidder”) tries to foreclose, the fmr homedebtors/occupants will just file for BK during the proceedings (if they’re still eligible – to obtain more months of squatting). When Joe S.I. finally figures out what he’s doing a few weeks/months later and obtains a release of these deadbeats automatic (BK) stay to continue the foreclosure process, the deadbeats will leave all their non-running vehicles (w/no paperwork, to make it very hard to dispose of them) on the property and dump spoiled food, garbage, weeds, tree branches, discarded household effects and clothing mixed up together all over the property (inside and out) and the curb by the time the sheriff’s dept arrives to evict them and change the locks.

When Joe S.I. investor finally gets possession of the joint, he will notice that every single wall and door has been punched in and several fixtures and appls stripped, the fence broken down, the garage torn up and full of disgusting biohazard and other toxic waste, and he needs to fill a min of 3-30 ft rollaways (at $5-6K)to recover his “shell” of a house. At this point, Joe S.I. may as well knock it down to the studs and start over!

Sorry, but a homedebtor who has been “squatting” off and on for half a decade or more isn’t going to go “quietly and neatly.”

Nobody in their right mind is going to agree to being “forced” to “make a deal” with career-squatters who have already had way too many chances to p___ or get off the pot and failed at all of them (by design).

I’ve seen enough over the years to know that we all pay for exactly what we get in this life. I agree with spd. Prospective “investors” should just buy direct from FNMA or a lender who has cleaned up the property (at least broomswept) and caught up the taxes on it.

[bearishgurl]

I want to know if the “winning bidders” receive the original loan application for the defaulted-upon mortgage(s), copy of defaulted upon note(s) and copy of any mods with all terms the homedebtors signed up for from FNMA at the conclusion of the auction and winning bid payoff. Signed, sealed and delivered. I also want to know if the “winning bidder” receives the homedebtor’s entire loan history showing any periods of forbearance and any instances of waivers of back interest, etc, made by the servicer.

Essentially, the entire package on the homedebtor(s).

[spdrun]

It’s like buying a vehicle at a US Customs auction from a collection that has been gathering dust on a vacant dirt lot for up to TWO YEARS and none of them have even been driven since they were “detained” in secondary.

No it isn’t. It’s like buying the registration card and being told “you might be able to find the vehicle over there.”

[bearishgurl]

[quote=spdrun]

It’s like buying a vehicle at a US Customs auction from a collection that has been gathering dust on a vacant dirt lot for up to TWO YEARS and none of them have even been driven since they were “detained” in secondary.

No it isn’t. It’s like buying the registration card and being told “you might be able to find the vehicle over there.”[/quote]

LOL! At least the contractors for US Customs either drive the vehicle out to their tow yard entrance in Otay Mesa (or onto your waiting tow truck if it can’t be jump-started). The only thing is, the “winning bidder’s” gotta come back another day as they remove the vehicles row by row (by appt) after the auction.

The contractors don’t advertise an auction until they have enough vehicles to fill the yard parked side by side (400-2000, depending on contractor).

They’re sorted by make for viewing and bidding.

[bearishgurl]

[quote=flu]…What does this mean for “small investor(s)?”[/quote]

It means, “Caveat emptor” …. x 100.

[Author]

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