Las Vegas Homeowners --- Who Really Owns your Loan?
Posted by Paul Francis on Thursday, November 24th, 2011 at 7:39pm.Who Really Owns Your Home Loan?
I was recently reminded of just how confusing this was when a client of mine who works for a big bank asked what I meant when I updated him to let him know that the final Short Sale Aproval was submitted for a "final" approval by the investor that actually owns the loan.
This whole time he thought it was up to "Big Bank" to approve the short sale... So it threw him off a little when I had to explain that "Big Bank" was just a loan servicer and the entity that actually owned the loan was Fannie Mae.
He's been sending his payments into "Big Bank" but this whole time... that big bank was just "servicing" the loan.
Think of it like you are renting a home managed by a Professional Property Management company. You make the rent payment to the Property Management Company and the PM Company turns around and cuts a check minus it's fees to the actual homeowner.
Many of thes big banks do not actually make the final decision to modify a loan OR short sale a Home loan but merely "service" the loan. They may have the guidelines from the investors that actually own the loan that they are working for.... but they do not make the final approval.
It's very easy to be confused with this .... especially with everything you hear in the Media. Even Representatives that say they are doing everything possible to help voters out are confused on how the system works.
Here is a recent statement from Congresswoman Shelley Berkley in the Local Media:
"The idea that lenders can voluntarily do this is not right because they are not stepping up and not doing enough to help people. It makes no sense to me," she said.
The sad part is though... that Fannie Mae and Freddie Mac are some of these entities that can be quite difficult and slow to work with when getting a loan modification or a short sale approval. While the Mortgage check might be going to a particular "bank", that bank may not actually give the final stamp of approval.
I would think that the Representatives in that article would know about Fannie Mae & Freddie Mac costing the U.S. Taxpayer over a Hundred Billion dollars so far and would have some idea of just how many loans these two entities own and make the final decision on. You would think that if U.S. Taxpayer Dollars are being used to keep them going that there would be some sort of leverage and start there in "helping people".
Because quite frankly, the Las Vegas short sales that I've done which were actually owned by a bank, AKA "Portfolio Loans" have been far easier to do then the ones owned by Fannie Mae and Freddie Mac.
For example, I recently had two short sales where we had to go through Citimortgage. The one that was actually owned by Citimortgage gave a really good deal to the homeowner after the buyer cancelled the purchase and allowed the homeowner to keep the home by cramming down the mortgage to today's market value. The other one was owned by Freddie Mac and it was far more difficult and very time consuming to say the least.... with an inflated value that they wanted in order to approve the short sale on top of that.
So Who Owns Your Las Vegas Home Loan?
Here are some tools to find out if Fannie Mae or Freddie Mac owns your home loan:
These are the two biggest entities that actually own home loans and have "Big Bank" servicers work for them. There are many others but Fannie Mae & Freddie Mac actually has a simple online lookup tool. So even though you might be paying your mortgage to Bank of America or Wells Fargo, Fannie Mae and Freddie Mac may be the ones that actually own the loan and make the final decision.
Las Vegas Short Sale Expectations
Just because your friend or neighbor may have gotten a good deal through the same bank (or had a horrendous experience) that you pay your mortgage to, that does not mean that you are automatically going to have the same experience.
Understanding all of the above is key when it comes to doing a short sale so everybody knows what to expect. Too many false expectations are made from "hearing" stories about short sales. Some of them are easy, many are not. Just because somebody else had a short sale approved in a week or two (I've had a couple), most of them are NOT. There are plenty of PR campaigns out there... and that's exactly what they are; Public Relation Campaigns that are often spread like wildfire from the not so experienced short sale agents. Feel free to take the time to read my September Short Sales Report for Las Vegas to see the reality of what's really been going on with Short sales so that you don't fall for the hype and have unrealistic expecationts.
After a significant improvement in short sale closings (and avoiding Foreclosure) from September of 2009 to September of 2010, there was a decrease in year over year results from September of 2010 to September of 2011 of -8.55%.
For more information on seeing if a Las Vegas short sale is right for you, simply call me at 702.592.3058 or fill out my Las Vegas short sale form.
Paul Francis
Prudential Americana Group, REALTORS
Las Vegas Real Estate
702.592.3058
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