Changes that affect foreclosures from Fannie Mae
Sunday, February 28, 2010
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With the purchase of a foreclosure, banks have always insisted on using THEIR preferred title company. In Arizona, the title company is a neutral third party that is a liaison between the buyer (you) and the seller (bank).
Lets be realistic, if you or I went to the same store every other day, or the same restaurant every other day, not only would the employees or manager get to recognize us, chances are, we would probably receive extra discounts, exemplary service, and a "bend over backwards" customer service.
Basically, until just recently, the bank/seller received these benefits. NOW, we choose the title company. Seems like a small change, but remember, these title companies want to earn MY client's business (as an agent) so they will make extra sure my clients are happy... I think we will get better service with continued patronage.
Please keep in mind that this change ONLY effects loans that are backed by Fannie Mae (current estimates are upto 50% of loans are Fannie Mae)
Certainly not every foreclosure will be changed by this rule. many of them will still require the seller's choice of title company.
Here is the addendum in question:
For many years now Fannie Mae has been using basically the same addendum which stated that the buyer MUST use the seller's title agent.
The addendum has been dramatically CHANGED in that it now states: "The closing shall be held at a place so designated and approved by the Purchaser". This is an absolute turnaround from previous versions wherein it stated that the purchaser MUST use seller's title agent! The buyer's right to now select the escrow company can be found in Section 2B, page 1, line 4. When representing a buyer, do not allow the REO agent to dictate the title company any longer on Fannie, as this would not be fiduciary. If the agent challenges you, simply educate them on where the Addendum gives the buyer this right.
The net effect of this new addendum is that the buyer can now make his/her own selection as to title agent and will then be better protected against any prior title defects.
Posted by Brian on 09:25 PM • (0) Comments • (0) Trackbacks • Permalink • Email This Post
