REO sale gone too fast -- shenanigans? (appraisal, agent, accept)
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I found a situation with a Fannie Mae REO that I can't understand, and I think there may be some shenanigans going on here (with Fannie Mae's taxpayer money no less). I am tempted to follow through and file a complaint with someone, somewhere, for this to be investigated.
What happened?
- Property was listed for about 15-20% below its fair market value
- The listing agent is strange: no contact info on their web site, no list of properties on their web site, and when my realtor found their phone numbers, well, one number is never answered and the other is a mailbox that is always full. What realtor can work like this?
Anyway, I submitted what I thought was a strong offer:
- submitted within 4 business hours of the property coming on the market
- offered a price above their asking price
- cash offer, including proof of funds
- 10% down, submitted with the offer
- close in 2 weeks
- I am 1st Look qualified
Offers like this don't get any better, right? Well, my offer was summarily rejected by the listing agent because "seller has already accepted another offer". How can this be? Was my offer ever submitted to the seller? Does FM ever accept offers so quickly? If indeed there was another similarly strong offer, wouldn't they notify us of a multi-bid situation and ask for a "best and final offer"?
I am thinking that this sale was rigged to sell the property to some "friend" at a low price. That wouldn't bother me so much if this wasn't Fannie Mae, who we taxpayers are bailing out. Either the FM asset manager rigged this (in cahoots with an appraiser for a low appraisal and a shady realtor for a targeted sale) or the realtor intentionally withheld my offer from the seller.
What do you guys think may have gone on here? And if indeed there are some shenanigans involving FM, how would I follow through to complain / investigate?
Happens quite often. Sometimes it is "an inside job" where listing agent is steering bargains to friends, but more often the place needs work and will not qualify for financing so buyer has to be investor with funds to fix it up. Some agents do kinda "specialize" in these sorts of deals and the Fannie / Freddie are happy to have a "pipeline" of investors that may even take a "bundle" of properties, some trashed, some almost "ready to move in" and secure them all QUICKLY -- once a property becomes REO it costs the lender a FORTUNE to prevent "recyclers" from pulling out pipes and wiring in some areas.
Of course often the lender has only a vague sense of how rough an area might be, and some of these "pipeline" agents don't bother to let the lender know that there gems mixed in with the junk. Techically they do have a "hotline": Fraud Tips Hotline at 1-800-732-6643.
Thanks for your expanded view and the hotline number. Very useful.
Quote:
Originally Posted by chet everett
Some agents do kinda "specialize" in these sorts of deals and the Fannie / Freddie are happy to have a "pipeline" of investors that may even take a "bundle" of properties, some trashed, some almost "ready to move in" and secure them all QUICKLY.
In this case it can't possibly be the pipeline of investors. The property is still on 1st Look, and supposedly only people who intend to make it their primary residence can apply. It should not have been open to the pipeline of investors.
Even thought it is on 1st Look, an investor can submit an offer. It just isn't accepted until after the 1st Look period has passed. If the investor offer is stronger than an owner-occupant received during 1st Look, the investor offer might be accepted.
Even thought it is on 1st Look, an investor can submit an offer. It just isn't accepted until after the 1st Look period has passed. If the investor offer is stronger than an owner-occupant received during 1st Look, the investor offer might be accepted.
Yes, but the listing realtor was saying that the seller has accepted another offer still during 1st Look. So it can't be an investor.
I found a situation with a Fannie Mae REO that I can't understand, and I think there may be some shenanigans going on here (with Fannie Mae's taxpayer money no less). I am tempted to follow through and file a complaint with someone, somewhere, for this to be investigated.
What happened?
- Property was listed for about 15-20% below its fair market value
- The listing agent is strange: no contact info on their web site, no list of properties on their web site, and when my realtor found their phone numbers, well, one number is never answered and the other is a mailbox that is always full. What realtor can work like this?
Anyway, I submitted what I thought was a strong offer:
- submitted within 4 business hours of the property coming on the market
- offered a price above their asking price
- cash offer, including proof of funds
- 10% down, submitted with the offer
- close in 2 weeks
- I am 1st Look qualified
Offers like this don't get any better, right? Well, my offer was summarily rejected by the listing agent because "seller has already accepted another offer". How can this be? Was my offer ever submitted to the seller? Does FM ever accept offers so quickly? If indeed there was another similarly strong offer, wouldn't they notify us of a multi-bid situation and ask for a "best and final offer"?
I am thinking that this sale was rigged to sell the property to some "friend" at a low price. That wouldn't bother me so much if this wasn't Fannie Mae, who we taxpayers are bailing out. Either the FM asset manager rigged this (in cahoots with an appraiser for a low appraisal and a shady realtor for a targeted sale) or the realtor intentionally withheld my offer from the seller.
What do you guys think may have gone on here? And if indeed there are some shenanigans involving FM, how would I follow through to complain / investigate?
I would love to hear what you find out. I gem of a property just came on in my neighborhood and an offer was mysteriously accepted as I was waiting in the wings to place my own. I'm calling the hotline on Monday, but this deal seems shady as well. i will let you know.
This article is about short sale fraud. The OP made an offer on an REO. The bank already owns the property so there is no short here.
Thanks for pointing that out. I was so appalled (yes, I am sometimes naive) that I missed the distinction. However, I do have a question. If the REO is sold to an "insider" for less than owed, does Fannie Mae pay the bank the difference? TIA.
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