Do we have any recourse for last-minute change on Fannie Mae HomePath sale?

Asked by mjare46, Friendswood, TX Fri Mar 29, 2013

My daughter found a townhome on HomePath which she really liked. REO agent listed it as a 'townhouse', county records described it as a 'single-family townhouse unit' with separate values for lot and structure. Her RE agent, insurance agent and lender all proceeded with loan on the basis it was a townhome. We even opted for the 5% down program over 3.5% program because it had a better rate for just $247 more. We had also elected to use sellers attorney to process closing to save on CC expense. In spite of several requests from her lender, the attorney did not provide lender with title work until 2 days before closing. It turned out that because the property was actually a CONDO, the insurance had to be adjusted AND the discount rate was increased by nearly $500 solely because of the property class chg. Also, attorney had scheduled closing for today but did not provide my daughter with HUD until 2 hours before. Her RE agent advised against rescheduling as more problems would arise.

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Sat Mar 30, 2013
When a Real Estate Agent lists a Fannie Mae REO for sale, they follow the directions sent to them from their Asset Manager. If the county records did not identify it as a condominium, there would have been no real reason for the Lisitng Agent or your Buyer's Agetn to have suspected any different.

Whenever purchasing any home with an HOA, the buyer should ALWAYS read the By Laws. This would have identified the property as a Condo instead of a PUD. Until title comes back, we have to use whateve infomation that is availble to us through publlic data sources.

A Conventional mortgage for a Condo will always have a pricing adjustment when the down payment is
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David Herren, Agent, Atlanta, GA
Sat Mar 30, 2013

Unfortunately, these are some of the risks of buying bank owned property. At this point you can either move forward with the deal having full knowledge now of what you are buying and what it will cost, or you can walk away. If you walk away, you have little chance of recovering any money you have spent so far.

If you buy the property, do so with the knowledge of what you are buying, and of problems that might occure in the future. Does the HOA have strong reserves for maintenance and emergency repairs? Are the buildings in good condition? Is everyone current on their HOA dues? If the answer is no to any of these questions, or you do not know, walk away. You will be better prepared for the next deal.


Dave Herren
Best Atlanta Properties
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Michael Hamm…, Agent, Suwanee, GA
Sat Mar 30, 2013
As you can see, mjare46, there is a wealth of info on Trulia simply by asking for it. Consider starting here next time instead of ending here. And advise your friends and family to do the same. Please call, text or email if we can provide further assistance. Good Luck!

Michael Hammond
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Hank Miller, Agent, Alpharetta, GA
Sat Mar 30, 2013
How do you and your agent get this far down the path and not understand the ownership rights? Did you do due diligence? Did you review the CC&Rs? Dealing with FNMA is always an adventure and it is always buyer beware.

Also, if you wnet with a homepath mortgage, there probably wasn't an appraisal as FNMA dosen't require them for that. You might even be overpaying - this could end badly. You need to light a fire under your agent, they missed basic fundamental checks and you are in the squeeze.

It's nice to blame others but this started with your agent missing that it was a condo - not fee simple. That's on the agent as I see it.

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Becky Loar, Agent, Lawrenceville, GA
Fri Mar 29, 2013
Well, I feel like I can actively answer these now in that I am revamping myself to help buyers and sellers and asset manager across the country after beating the pavement for 33 years of which 23 were in REO. Taking up for the agent, they assign the new assets by street name an number and city with the default mortgagor listed too. No other info- no REO forecloure deed- nothing. In th beginning I had to get real savy in going to sourcers that were available to agents. My item on my task is to go into the country records to pull my own warranty and security deed that was foreclosed on. In one of the seccurity deed payments it will list the CONDO rider and or the PUD (planned unit development rider) It will also give you the plat book and number of site and it definitely says CONDO Plat Book! In the listing agent research, she could have easily come up with the correct managment compan or a contact to the board as it would have been given to the closing attorney prior to closing for the tile insurance. Instead of homeowner insurance for the entire structure you will only be paying a little more than rental insurance because the owner only owns the space between the walls of her unit and has not land rights. However she does own an undivided interest with all the owners on th common areas. I am not familiar the discount rate rising however there have been many changes in the lat 6 years. If she got a good deal, get a Home Warranty (sometimes provided by Homepath or I have a great HW company I used that covers everything. Be patint an close with this loan if she like it. I have seen the closing attorneys not even get th HUD one out on the same DAY! Trust me this happens more times than you could possibly imagine. There are some other resources on HUD.GOV that you can look up on their approved condo list and other elements that take into place. Don't worry about th lot and structure bing taxed separtely- thy do that on single famiy homes too. The good thing is that Fannie/Homepath does not charge for an appraisal (to my last knowlege) which saves money an in the condo- her insurance will be lower due to it is not on the structure- ony the content. Closed it if you can- pricing is going up and who knows that were ever be deals again! I hope tht helps- you can checky me out on LinkdIN for my credentials-Becky Loar or privaatly email me at Have a wonderful Easter Weekend,
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