FNMA Secret Blacklist: Understanding Fannie Mae’s Covert Condo Clampdown

REAL ESTATE NEWS (Los Angeles, CA) — In the labyrinthine world of real estate and mortgage financing, a clandestine maneuver by a government-sponsored entity is causing ripples of confusion and frustration. Fannie Mae, the Federal National Mortgage Association, has been discreetly compiling a blacklist of condominium properties nationwide – a list that is not only growing but also shrouded in mystery. This article dives deep into this perplexing development, unraveling its implications for condo sellers, buyers, and the real estate market at large.

Unveiling the Secret

The existence of this blacklist came to light through investigative journalism, particularly a detailed article in the Boston Globe. The piece, a meticulous work by correspondents Jim Morrison and Larry Edelman, uncovers the clandestine practices of Fannie Mae in maintaining a list of condo developments deemed ineligible for mortgage purchases.

The Blacklist: A Growing Concern

As of October 2023, the blacklist included over 2,300 condo developments across the United States, with a notable presence in states like Massachusetts, Florida, and California. The rationale behind this secretive list stems from various factors, including deferred maintenance, legal entanglements, and financial irregularities within condo developments.

A Domino Effect on the Real Estate Market

The blacklist’s existence poses significant challenges for condo owners and potential buyers. Since Fannie Mae and Freddie Mac dominate the mortgage market, being on this list means fewer financing options for buyers, leading to failed sales and reduced property values.

The Surfside Tragedy: A Catalyst for Change

The list’s expansion is partly attributed to the catastrophic collapse of Champlain Towers South in Surfside, Florida, in 2021. This tragedy prompted Fannie Mae to tighten its eligibility requirements, emphasizing the need to address aging infrastructure and maintenance issues.

Transparency and Accountability: The Core Issues

The secrecy surrounding the blacklist raises questions about transparency and accountability in the housing finance sector. Unlike the Department of Housing and Urban Development, which makes its denial lists public, Fannie Mae’s approach leaves many in the dark, including homeowners and potential buyers.

The Impact on Communities and Individuals

The blacklist not only affects large-scale real estate dynamics but also has a profound impact on individual lives and communities. For instance, Susan Evans, president of the Brook Village condo association in Boxborough, Massachusetts, was unaware of her complex’s presence on the list until informed by the Globe. The inclusion was due to groundwater contamination issues, highlighting how environmental factors can inadvertently entangle properties in this secretive web.

Looking Ahead: The Path to Resolution

Removing a property from the blacklist is a complex process, requiring sufficient documentation and resolution of the issues that led to its inclusion. This process is often arduous and not well understood by many affected parties. It calls for greater transparency and communication from Fannie Mae to ensure that properties have a fair chance to rectify their situations.

The Call for Change

As the real estate market grapples with this covert practice, there’s a growing demand for transparency and fairness in the handling of the blacklist. Legal experts, property managers, and homeowners are calling for a more open approach that balances the need for risk management with the rights and needs of property owners and buyers.

A Complex Puzzle with Many Pieces

Fannie Mae’s secret condo blacklist represents a complex interplay of real estate, finance, and governance. As the list continues to grow and affect more properties and individuals, the need for clarity and fairness becomes increasingly apparent. It’s a situation that calls for careful consideration and action from all stakeholders involved in the housing market, from government entities to individual homeowners.

In this ever-evolving landscape, staying informed and proactive is crucial for anyone involved in the condo market. Whether you’re a seller, buyer, or industry professional, understanding the dynamics of Fannie Mae’s blacklist is key to navigating these challenging waters. | MORE

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

Reverse Rising Interest Rates with Seller Concessions

Getting interest rates lower for a faster, easier home sale

REAL ESTATE NEWS (Los Angeles, CA) — Interest rates are going up, but here are some excellent solutions. Seller carry financing, seller mortgage rate buy-downs and other seller concessions can make it easier and more affordable to buy a home. Turn high interest rates upside down! Sellers are providing more help to buyers, with the help of some home loan professionals.

As the market slows down due higher interest rates, here is a quick bulletin to help buyers and sellers to get a property sold — even a non-warrantable condo listing! It starts with two powerful words: Seller Concessions. The Loft Blog knows of some local area mortgage professionals who have multiple loans locked this month at 4.99% for litigated condos. All of them have seller concessions, used to buy down the note rate from approximately 6.5% to 4.99%. Most are 3.00% concessions.

Here’s the math for a $600,000 property listing:

Scenario #1. Buyer and seller settle on a $585,000 price (a 3% price reduction) no concessions, and buyer gets a 30 year fixed mortgage at 6.5% (6.539% APR) 0 pts, on a $438,750 loan (25% down)

Payment is $2773 P&I and down payment is $146,250.

Scenario #2. Seller counters at full price with a 3% seller concession instead of 3% price reduction. Buyer gets a 30 year fixed mortgage at 4.99% (5.296% APR) with a 3% loan origination fee paid by the seller concession, on a $450,000 loan (25% down) Payment is $2413 P&I and down payment is $150,000.

Scenario #2 gets the deal done.

The buyer gets a rate of 4.99% and only has to put down $3750 more, AND, has a payment that is $360 less than Scenario #1. They make back the $3750 in 10.4 months with the reduced payments!!!

The best part is: It’s a wash for the seller, as they net the exact same amount.

PS. It works the same for single family homes too, with rates now back to 3.99%.

Experienced mortgage lenders say that this market will wash out many lenders and agents, but hard work and out-of-the-box thinking can make a home sale happen. New ways of financing are an absolute must to survive for prospective home buyers, sellers and investors.

Request a free report, and tell us about any desired transaction that might benefit from this winning combination of mortgage loan with seller rate buy-down. Fill out the online form:

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Home sale quicker with an interest rate buydown through seller concessions

Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Realty Source Inc, DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.