Foreclosure Sales

[Birdman]

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]

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]

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]

You mean an REO sale? A foreclosure is a transfer back to the mortgagee and is a legal procedure, not a market transaction.

 

[Birdman]

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

 

[Mr Rex]

Jim,

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

Thanks for the help.

Steve

That would be a REO sale.

 

[JSmith43]

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]

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]

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]

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