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Foreclosure Sales

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Birdman

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Can we use foreclosure sales per Fannie Mae guidelines on a regular 1004 refinance? I'm working on a report and I'm having a terrible time finding "normal" sales.

Thanks
Steve
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Yup. If the foreclosures are the typical sale in the market, if the other houses have to directly compete with them or not sell, then they are driving the market and should be considered.
 

MCC6

Sophomore Member
Joined
Jan 14, 2005
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Jim is correct. If foreclosures are a prevailing force within the overall market, you should feel free to use them. At the same time, explain your use of them and, if you are able, include market data to back up your rationale.
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
You mean an REO sale? A foreclosure is a transfer back to the mortgagee and is a legal procedure, not a market transaction.
 

Birdman

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
You mean an REO sale? A foreclosure is a transfer back to the mortgagee and is a legal procedure, not a market transaction.

Jim,

No I mean a sale where the buyer buys the property from the original lender.

Thanks for the help.

Steve
 

JSmith43

Elite Member
Joined
May 5, 2003
Professional Status
Certified General Appraiser
State
California
My guess is that in most markets there will remain a measurable difference between foreclosure sales and sales of owner-occupied properties where the goal is not a mass liquidation of inventory to enhance capital reserves calculation, etc.

Stigma may be part of the equation, not to mention, the typical "as is" terms with scary addenda written by mean foreclosure attorneys:icon_mrgreen:

I'm not opposed to using them, but more than likely, they should be tested against non-foreclosure sales with an eye out for detecting a percentage adjustment.

Once developed, the adjuster can be used over and over, with periodic validation.
 

Birdman

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
In this particular market there are sales within the same subdivision that are REO's and then there are a few arms-length sales. If these competing properties are in similar condition there appears to be little if any differance in the final sales price.
 

JSmith43

Elite Member
Joined
May 5, 2003
Professional Status
Certified General Appraiser
State
California
In this particular market there are sales within the same subdivision that are REO's and then there are a few arms-length sales. If these competing properties are in similar condition there appears to be little if any differance in the final sales price.


You have just written your summary comments in defense of using the REO sales without adjustment. If your comments are challenged by a reviewer, I'm sure you can defend them. But that don't make you bullet proof!
 

Birdman

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
You have just written your summary comments in defense of using the REO sales without adjustment. If your comments are challenged by a reviewer, I'm sure you can defend them. But that don't make you bullet proof!

Got any idea where I can get a vest? lol

SS
 
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