the wasserblawg

by  Michael H. Wasserman, Attorney at Law Starting today,  Fannie Mae   homebuyers who plan to be owner-occupants get a 20 day “First Look” at foreclosed homes without competition from investors.  Freddie Mac  has been offering the 20 day first look since December 17th. The first look window for Chicago area properties had previously been 15 days, Homebuyers shopping for homes  can see which properties are restricted to First Look bidders in Fannie Mae’s “real estate owned” (REO) inventory at  HomePath.com  and for Freddie Mac REOs at  HomeSteps.com    Source:  fanniemae.com  and  freddiemac.com . - See more here.

The lenders, as a group, seem to be doing a good job at screwing things up even before they get to their orders of foreclosure. They are making it harder and harder for distressed owners to offer compromise or "short sale" proposals. In just the past month, I have seen three contracts canceled in situations where the mortgage holder has taken too long to decide whether to accept a short sale or out-right dis-approved the sale. Short sales are a necessary and utile solution for owners (and their lenders) where the value of the property is less than the amount owed on the mortgage. The owner, if they can sell for the current market value can get out from under the mortgage obligation without having to resort to foreclosure or bankruptcy and at least minimize the damage caused to their credit ratings. The lender can get back much of the mortgage money lent without having to incur costs of a foreclosure or the time delay involved in a foreclosure. But the lenders are either unwil...

Any looking to understand how and why the mortgage companies got themselves into the financial mess they are in will appreciate the experience a client of mine had recently while trying to buy a foreclosure property from the bank. The property in question was one of three units in a condominium building. For whatever reason, all three units are now owned by the three banks that foreclosed on the three mortgages used by the three original unit owners. Each bank undoubtedly made their borrowers covenant to maintain insurance on the condominium common elements. After all, if the building were to burn down, the lender would want to either see it rebuilt or to apply the insurance proceeds towards the loan repayments. Each of those banks also insisted that, in the event of an insurance policy lapse or cancellation, they would have the right to purchase insurance - at their borrowers expense - to prevent such losses. Standard procedure there. No surprises. BUT, now that the banks took contr...

Nothing should be simpler than a real estate transaction. The buyer giver the seller some money. The seller gives the buyer a deed and some keys. Everyone shakes hands and goes home. Seldom is life so simple. Take for example what is going on with my clients Brigham and Leslie, and how careful lawyering will save them from near disaster. This delightful couple is trying to buy a one million dollar home from a bank. The bank, sorry to say, owns the house because it foreclosed the former owner’s mortgage. After weeks and weeks of negotiations and preparation, we are supposed to close this week, tomorrow, actually. Only we won’t. Not yet anyway. In foreclosure cases, the Banks tend to call all of the shots. They require buyers to sign special contract riders that limit the Bank’s liabilities. Buyers take these properties “as is.” The Banks refuse to pay certain customary seller charges. They impose penalties on Buyers who are not ready to close on the appointed date, and then more often t...