REOs and FANNIE MAE DEEDS
Fannie Mae is now including in its REO contracts a three month prohibition against conveying one of its REO properties to a new Purchaser. This resale prohibition lasts for three months from the “date of this deed” (usually the closing date), and is limited to a “bona fide purchaser for value.”
This restriction also provides that during the three months limitation the sales price can not exceed 120% of the Fannie Mae sales price. Accordingly a purchaser of a Fannie Mae REO property could resell the property within the three month period if the sales price is less than 120%.
Finally, the restriction prevents the new purchaser from placing a deed of trust on the property for a principal amount greater than 120% of the sales price. Again this restriction is limited to three months from the “date of the deed.”
There has always been “anti-flipping” lender rules. But now Fannie Mae seems to be expanding them to include any resale or refinances of their REO property. Also these restrictions are now being spelled out explicitly in the Fannie Mae Deeds as a restriction that “run with the land.”
Please contact our firm if you have questions or need legal advice.
Tucker Griffin Barnes - Where deep insight equals powerful advantage.
Tucker Griffin Barnes - Where deep insight equals powerful advantage.
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Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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