Recently I have had several clients and realtors ask me my thoughts on the Fannie Mae financing program, Home Path. This is a program offered specifically for bank owned properties, properties tha have been foreclosed on and are now owned by Fannie Mae. While I believe that it is important for Fannie Mae to efficiently market and sell their bank owned properties in an effort to stabilize the housing market, I also have a fiduciary responsibility to my clients to be sure that this is an appropriate product for them.
The first and biggest concern I have is that the Home Path program offers an appraisal waiver on the subject property. In other words, Fannie Mae is offering the buyer financing on a particular property without requiring a third party appraisal.
The problem with that concept is that the appraisal is an independant report which establishes the market value of the property at that specific time. If a buyer does not have that independant determination of value to rely on then the value is being set by the seller, Fannie Mae. Call me crazy but I am not a big fan of buying a home, especially in a market which has seen continued value reductions, based on the seller's claim it's worth it, that I'm getting a deal or they are saving me the $350 appraisal fee.
Over the last five years we have watched as Fannie Mae make poor decision after poor decision. I do not believe that they ever did anything maliciously to deceive or hurt the consumer but I think we can all agree that in hind sight we all should have taken a step back and really questioned some of their actions. As a publicly traded company, presently losing billions of dollars with share holders and the US Government yapping at their heals....do we really want to save the $350 appraisal fee and take their word for the value of the property we are considering buying?
If you were buying ANY property other than a Fannie Mae owned property I can tell you now, Fannie Mae would NEVER, EVER allow financing on a property without an appraisal.
Food for thought!
