Last year Fannie Mae announced that they would no longer reduce the commission on a short sale below six percent. At that time, everyone was very pleased. Present company included. To further facilitate transparency, Fannie Mae also established a loan lookup tool on their website so that agents and sellers can verify whether Fannie Mae is the actual investor on the note in question.
You probably remember from Real Estate Principles 101 that many times when an individual receives a mortgage statement in the mail, this statement is from the servicing company who is merely servicing the note for some other public or private entity.
Knowing who the note holder is (and is not) when working short sales is very important. For example, if the note holder is Fannie Mae, than the Realtor® commission cannot be reduced below 6 percent. However, if the note holder is NOT Fannie Mae or Freddie Mac, the seller and servicer may be able to proceed with a short sale through the government’s new HAFA Program.
Here are a few links to the Fannie Mae and Freddie Mac Loan Lookup Tools:
You MUST use the lookup tools!
One of my real estate buddies called me today and told me he was super frustrated because GMAC did not approve the full commission on his short sale transaction, and it was a Fannie Mae loan. First thing we did was to use the lookup tool. (The property did not appear.) Then, I asked him to review for me where he got his information, and he told me that this information appeared on the Deed of Trust. Then, he and I had a moment where we began to discuss Real Estate 102.
You cannot refer to the Deed of Trust in order to establish the owner of the note. Remember that Fannie Mae and Freddie Mac are government established organizations that purchase loans on the secondary market. If the words ‘Fannie Mae Uniform Instrument’ appear on the bottom portion of the Deed of Trust, this does not mean that Fannie Mae owns your loan. Lenders who want the option to sell the note to Fannie Mae or Freddie Mac may use specific uniform instruments in order to open up the possibility to that secondary market sale in the future.
I’ve said this in practically every real estate-related blog post that I have ever written and I will say it again. When working on short sale transactions, you learn something new every day of the week. If you survive that wacky and challenging market, you will know more about real estate than you every thought possible and you will definitely be at the top of your game.
In the meantime, please use the lookup tools when working those short sale transactions.