FNMA Assignment of Purchase Contract: What You Need to Know
If you work in the real estate industry, chances are you have heard of Fannie Mae, the Federal National Mortgage Association, also known as FNMA. FNMA is a government-sponsored enterprise that provides liquidity to the mortgage market by buying and securitizing mortgages from lenders.
One of the ways FNMA acquires mortgages is through the assignment of purchase contracts. But what exactly is an FNMA assignment of purchase contract, and why is it important?
In simple terms, an FNMA assignment of purchase contract is a legal agreement between the seller of a property and FNMA. The agreement allows FNMA to purchase the property from the seller and assume the rights and obligations of the original buyer.
Why would FNMA want to purchase a property through an assignment of purchase contract? There are a few reasons:
1. To acquire non-performing loans: FNMA may purchase a property through an assignment of purchase contract if the original buyer is in default on their mortgage payments. FNMA can then take over the loan and attempt to work out a solution with the borrower.
2. To acquire foreclosed properties: FNMA may also acquire a property through an assignment of purchase contract if the property has already been foreclosed upon and is now owned by a bank or other financial institution. FNMA can then purchase the property from the bank and attempt to sell it to a new buyer.
3. To acquire properties with special circumstances: There may be situations where the original buyer of a property is unable to close on the sale, or there are other complications with the sale. FNMA may step in and purchase the property through an assignment of purchase contract to resolve the issue.
For buyers and sellers involved in an FNMA assignment of purchase contract, there are a few key things to keep in mind:
1. The terms of the original purchase contract still apply: Even though FNMA is purchasing the property, the terms of the original purchase contract between the buyer and seller still apply. This means that any contingencies, timelines, and other terms must be met for the sale to go through.
2. FNMA may require additional documentation: FNMA may require additional documentation from both the buyer and seller to complete the sale. This could include financial statements, proof of insurance, or other documents.
3. The sale may take longer to close: Because of the additional documentation and requirements, an FNMA assignment of purchase contract may take longer to close than a traditional sale.
In conclusion, an FNMA assignment of purchase contract is a legal agreement that allows FNMA to purchase a property from the original buyer. This can be beneficial for both buyers and sellers in certain situations, such as when a property is in foreclosure or has special circumstances. However, it`s important to understand the terms and requirements of an FNMA assignment of purchase contract to ensure a smooth sale.