Bank of America transferring the servicing rights of Fannie Mae and Freddie Mac home loans

Posted by Paul Francis on Wednesday, January 16th, 2013 at 10:15am.

More Headaches for Short Sales sellers who have Fannie Mae & Freddie Mac Home loans serviced by Bank of America?

Bank of America announces settlement with Fannie Mae and that it will be transferring the servicing rights of these particular home loans to Nationstar that you can read Here.

Bank of America also announced that it signed definitive agreements with two different counterparties to sell the servicing rights on certain residential mortgage loans serviced for Fannie Mae, the Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (Ginnie Mae), and private label securitizations, with an aggregate unpaid principal balance of approximately $306 billion. Transfers of servicing rights are subject to the approval or consent of certain third parties.

Part of the agreement entails Bank of America buying back home loans originated by Countrywide during the lax lending days and sold to Fannie Mae & Freddie Mac. That's actually probably a good thing because anybody with experience short selling properties knows that the Fannie Mae and Freddie Mac owned home loans serviced by Bank of America right now have been horrendous for the past year.

Inflated values / prices in order to approve the short sale, required paperwork that seems to change every other month while waiting for a short sale approval.... it's been a mess full of headaches to say the least.

Why is it a good thing for these loans being purchased back by Bank of America? I've never had too much of a problem getting a short sale approval for truly qualified Las Vegas short sale sellers with the Bank of America home loans that are actually owned by Bank of America or what we call the "Portfolio Home Loans". The big problems have ALWAYS been the Fannie Mae or Freddie Mac Owned Home Loans. (Numerous horror stories - too many to even mention.)

Personally, I'd probably be thrilled if a couple of my short sales with home loans owned by Fannie Mae & Freddie Mac were repurchased by Bank of America and maybe the nonsense would end.

Bad News for Short Sale sellers with the Loans being transferred?

Short Sales that could be a big waste of timeFor Short Sellers and the buyers currently waiting for a short sale approval that have Fannie Mae or Freddie Mac owned home loans being serviced by Bank of America that are going to be transferred... get ready to expect some bad news when they get transferred and having to start the paperwork process over.

Last June we had several Aurora serviced home loans that sold the servicing rights to Nationstar and all of the short sales in process had to have all of the paperwork processed AGAIN with Nationstar. Even the ones that were in the final approval stage under Aurora had to be started ALL over again -- resulting in several Las Vegas short sale sellers and buyers being completely frustrated with the short sale process. Not only that... but there were cases where they wanted EVEN more to approve the short sale and requesting the sellers to sign outrageous promissory notes.

I'm not guaranteeing it is going to happen again but it certainly happened before so I don't see anything changing. Bank of America has all of their forms / requirements for Fannie Mae and Freddie Mac owned home loans... Nationstar has their own procedure including requiring updated valuations. Don't expect all of the paperwork involved with a short sale to be transferred over to the new servicer. Prices have been going up in Las Vegas so get ready for the headaches.

Personally.... it's a great time to get back to the old days of representing buyers to buy Las Vegas short sales and find out who is servicing the loan and if they are Fannie Mae or Freddie Mac owned to help avoid the biggest headaches of short sales.

Paul Francis
Prudential Americana Group, REALTORS®
Las Vegas Short Sales





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