Close Fannie Mae deals on time or risk losing the transaction, your deposit, appraisal and inspection fees.
Recently, I had a transaction involving the purchase of a Fannie Mae owned foreclsoure (REO) property in Oakley with first time buyers.The contracts were signed on April 14,2009 with a scheduled close of May 29, 2009 (45 days). The buyers were pre-approved with Countrywide (Bank of America) and notified their lender immediately upon receipt of seller signed contracts. The buyers completed their inspections and ordered the appraisal on time and although there was some problems found in inspections, they moved forward and did not request credits or repairs. The appraisal was completed on May 11, 2009 and came in $5000 below the contract price. The buyers requested a price reduction from the seller (Fannie Mae) on May 12 whose asset manager replied verbally on May 13 that they would agree to the reduced price but stated that the buyers must close transaction on time. Fannie Mae did not return the signed price addednum for another week (May 20) delaying buyers lender from issuing loan documents. The lender also requested that seller (Fannie Mae) sign two buyer disclosures included with original offer and the seller refused, causing additional delays. After negotiating with both side, I successfully had the lender remove the conditions after proving that disclosures were included in the seller's addendums signed by all parties. Finally, after clearing all hurdles, the loan docs were issued May 28, one day before scheduled close. Due to a month-end push for other transactions, the title company was unable to prepare the signing docs and delayed the scheduled signing until June 1. The buyers requested a 5 day extension and agreed to pay late fees (per diems) of $100per day. Instead, the Fannie Mae asset manager rejected the request for extension and placed the property immediately back on market and told the buyers that they would forfeit their deposit.
This story has a happy ending.... We submitted a new identical offer for the property at the appraised value with no contingencies that was approved. The buyers signed both their loan docs and new contracts at the originally scheduled signing and received their keys on May 10, 2009 with no late fees or additional costs.