Fannie Mae CEO to Resign
Michael Williams, the CEO of Fannie Mae, announced on Tuesday that he plans to step down as CEO, but he will continue on in his role until a successor is named.
“The time is right to turn over the reins to a new leader,” Williams said in a statement, not providing a specific reason for his departure. Williams became CEO in 2009 of the financially struggling mortgage giant, which reported a $5.1 billion third-quarter loss in November.
Williams’ announcement follows a few months after Charles E. Haldeman, the CEO of sister company Freddie Mac, announced plans to step down as CEO sometime this year too.
Williams, Haldeman, and other executives at the GSEs have faced increased scrutiny on Capitol Hill in recent months over their hefty paychecks and bonuses, which have come at a time when the mortgage giants have continued to ask for more bailout money from taxpayers, CNNMoney reports. Williams and Haldeman’s paychecks in 2011 were expected to total about $6 million a piece.
The mortgage giants continue to face steep losses due to the foreclosure crisis. To date, Fannie Mae and Freddie Mac have received about $150 billion in bailout money, but that number could grow to $259 billion, according to the Federal Housing Finance Administration, the mortgage giants’ government regulator.
Source: “Fannie Mae CEO to Resign,” CNNMoney (Jan. 10, 2012) and “Top Executive Announces Plan to Leave Fannie Mae,” The New York Times (Jan. 10, 2012)
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Fannie Mae Halts Foreclosures for the Holidays
Fannie Mae says it will suspend evictions for single-family foreclosures and two- to four-unit properties during the holiday season, from Dec. 19 through Jan. 2, 2012.
“The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” Terry Edwards, executive vice president of Credit Portfolio Management for Fannie Mae, said in a statement. “No family should have to give up their home during this holiday season.”
While the holiday moratorium is in place, legal and administrative proceedings for evictions may continue, but “families living in foreclosed properties will be permitted to remain in the home,” Fannie Mae announced in a statement.
Source: Fannie Mae
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Watchdog Highlights Fannie, Freddie Staffing Shortfall
A study by the Federal Housing Finance Agency’s Office of Inspector General finds that regulators lack the staff to effectively oversee Fannie Mae and Freddie Mac and consequently have dialed down scrutiny of the government-sponsored enterprises.
The report singles out the FHFA’s monitoring of housing inventory owned by the GSEs. Despite a surge in foreclosures that has boosted Fannie Mae’s inventory sixfold in the past four years, the study states that “FHFA has yet to conduct a targeted examination” of how the companies manage seized properties.
Source: “Staffing Woes Harm Fannie and Freddie Oversight, Government Watchdog Says,” Bloomberg (09/23/11)
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Fannie Mae Revises Growth Estimate
Fannie Mae has revised its economic growth forecast to 1.4 percent this year, down from a July estimate of 2.4 percent, and to 2 percent for 2012, down from its prediction of 3.1 percent last month. The firm expects housing activity to weaken, except for the rental sector. The housing market and overall economy, it said, will be impacted by lower business and consumer confidence and a slowdown in hiring.
Source: “Fannie Mae Revises Growth Estimate,” TwinCities.com (08/23/11)
Congressman Introduces Bill to Scale Back GSEs
Rep. Jeb Hensarling, R-Texas, introduced a bill on Thursday to scale back Fannie Mae and Freddie Mac and privatize the government-sponsored enterprises within the next five years.
“What we’re trying to do is have a market-based system that doesn’t put people into homes that ultimately they can’t keep,” or require taxpayers to do pricey bailouts, Hensarling says.
Hensarling’s bill calls for eliminating the government’s role in Fannie Mae and Freddie Mac and the mortgage market. It also calls for the maximum size of loans across the country backed by Fannie and Freddie to drop to $417,000; loans, in general, currently range from $417,000 to $729,750.
Last month, the White House called for the phasing out of Fannie Mae and Freddie Mac and proposed three options on how. Congress has differed on its approach and the Hensarling bill is the first shot at legislation to wind down the GSEs, which is likely to spark other legislation in the coming months.
The Hensarling bill isn’t expected to go far, though, according to industry experts. Even if it does pass the GOP-led House, analysts say it’s unlikely the Democratic-led Senate will take up the bill.
Fannie and Freddie guarantee about $5 trillion in mortgages and were taken under government conservatorship in 2008.
Source: “Hensarling Unveils U.S. Bill to Wind Down Fannie, Freddie,” Dow Jones International News (March 17, 2011)
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Fannie, Freddie Probe Focuses on Disclosure
The Securities and Exchange Commission has notified several former Fannie Mae and Freddie Mac officials that it will recommend civil enforcement actions for their roles in corporate misconduct leading up to the financial meltdown.
The probe is focusing on disclosures by the firms regarding subprime loan exposure, which critics say was played down. It remains to be seen whether the companies themselves will be included in the enforcement action, given that U.S. taxpayers will bear the burden of any charges.
Source: “Fannie, Freddie Probe Focuses on Disclosure,” The Wall Street Journal, Nick Timiraos and Jean Eaglesham (03/14/11)
Fannie-Backed Loans to Get Costlier
Borrowers with Fannie Mae-backed loans will face higher borrowing costs and interest rates, even if they have a perfect credit score, starting on April 1.
The agency is imposing a “loan-level price adjustment” on several mortgages, in which borrowers will be charged more in cost or higher interest rate based on how much down payment — or if they’re refinancing the amount of equity in their home — as well as their credit score, explains mortgage expert Bill Gassett in the Massachusetts Real Estate News.
Prior to the adjustment, a buyer with a 700 credit score and a $160,000 mortgage who was purchasing a $200,000 home may pay an additional $800 in these fees. That cost would now be doubled: The loan’s risk-based pricing would equal $1,600, said Cameron Findlay, chief economist for LendingTree.
Borrowers who don’t have large down payments or who have low credit scores will see higher rates. But even borrowers with good credit scores will have to pay more too.
For example, Gassett explains that a buyer with a credit score over 740 who has a 25 percent or lower down payment will now pay about 0.125 percent more in rate.
For any buyer or refinancers of a condo (excluding detached condos) who have less than a 25 percent down payment will face an increase in rate of nearly 0.5 percent.
“It certainly says that even with a great credit score, they still see some risk in you,” Findlay told The Wall Street Journal.
Some lenders have already started incorporating the higher fees.
Not all loans will be subjected to the fees, experts note. For example, not all lenders sell all mortgages to the secondary market and loans insured by the Federal Housing Administration also will be immune.
Source: “Fannie Mae Mortgage Interest Rates & Costs Rising,” Massachusetts Real Estate News (Jan. 30, 2011) and “Mortgage Fees on the Rise Again,” The Wall Street Journal (Jan. 25, 2011)
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People Still Want to Own a House: Fannie Mae
The desire to own a home hasn’t been diminished by the downturn in the industry, according to a survey by Fannie Mae.
51 percent of owners and renters say that the housing crisis has not affected their overall willingness to buy a home. About 27 percent said they are more likely to buy since the crisis, presumably because of lowered prices, and 19 percent said they are more likely to rent.
In the short term, Americans are nervous about buying. About 33 percent say they would be more likely to rent their next home than buy, up from 30 percent in January. Among renters, 59 percent said they would continue to rent in their next move, compared to 54 percent in January 2010.
Other findings include:
· 66 percent of respondents say they believe that housing is a safe investment – as safe as an IRA or a 401(k) plan.
· About 50 percent say they believe that owning is a good idea, even if they plan to stay in the home less than three years.
· 86 percent identify tax benefits as a reason to buy, even though tax benefits are small or non-existent for many homeowners.
Source: Fannie Mae (12/15/2010)
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Fannie, Freddie Pressed to Reduce Mortgages
The Obama administration is pressuring Fannie Mae and Freddie Mac to write down “underwater” home loans through fledgling FHA and Treasury programs.
The aim of the initiatives is to reduce loan balances, which Fannie Mae and Freddie Mac have been reluctant to do because it would deepen their losses.
However, the Obama administration wants to reduce the threat to the housing market posed by homeowners believed to be at risk of default should their personal finances or home prices worsen.
Source: Wall Street Journal, Nick Timiraos, Alan Zibel (12/08/10)
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Cost of the Fannie, Freddie Bailout
The government estimated last week that the bailout of Fannie Mae and Freddie Mac is likely to cost U.S. taxpayers $154 billion. This is more than originally estimated, but less than what the government called a worse-case scenario.
Fannie and Freddie have already withdrawn $135 billion. They are expected to seek another $19 billion by 2013 to offset mortgage crisis losses.
“It cost a lot less than what people feared, largely because the economy has stabilized,” Moody’s Chief Economist Mark Zandi says.
Source: USAToday, Paul Dividson (10/21/2010)
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Fannie and Freddie Offering Hard-to-Beat Deals
Beginning this week, Fannie Mae and Freddie Mac are trying to sell off 150,000 foreclosed homes by offering low down payments, no requirement for mortgage insurance, and up to $30,000 added to the mortgage for renovations. In addition, the real estate practitioner selling the property gets a $1,500 bonus.
In some neighborhoods, these properties undercut the average listing by $100,000.
Fannie and Freddie already have repaired the biggest problems with the property including roofs, plumbing, and electrical work.
Buyers who plan to live in the properties get a 15-day chance to view the homes before investors can purchase them. Investors with cash will likely snap up any properties remaining at the end of the grace period.
“Our goal is to recover as much as we can to offset our loss and not to be low balling properties just to move them,” says a Freddie Mac spokesperson. “We absolutely have no motivation to be leading a downward spiral in home prices.”
Source: Smart Money, Anna Maria Andriotis (09/28/2010)
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Fannie Mae Offers a Break to Service People
Fannie Mae says it will reduce or suspend mortgage payments for up to six months for military families if they are unable to pay because of the injury or death of a service member.
Military members or surviving spouses should contact their mortgage company or call this special military phone number: (877) MIL-4566.
Source: The Associate Press (09/27/2010)
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Fannie Mae Offers New HomePath Incentives
Fannie Mae on Thursday announced an expansion of the company’s REO program, HomePath.com.
HomePath already offers owner-occupant buyers 3 percent down with no mortgage insurance. The expansion gives these home buyers up to 3.5 percent of the final sales price to use toward paying closing costs. A home warranty also will be available.
In addition, real estate practitioners who represent owner-occupants will receive a $1,500 bonus. Eligible offers must be submitted on or after Sept. 23 and must close by Dec. 31.
Source: Fannie Mae (09/23/2010)
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Higher Conforming Loan Limits Due to Expire
Unless Congress intervenes, the maximum amount the Federal Housing Administration as well as loans backed by Fannie Mae and Freddie Mac can back will return to $417,000 in most areas and $625,500 in a high-cost areas.
Over the last two years, the government raised the limits in some high-cost areas to $729,750.
If Congress doesn’t extend higher limits, home prices would “drop precipitously” because it would be “impossible to finance homes in most parts of Los Angeles and certain other major cities,” said Rep. Brad Sherman, a California Democrat and member of the House Financial Services Committee,
But many economists support the end to higher limits. “We need to think how we are going to exit from a Fannie-and-Freddie world, and this is a very small step toward that exit,” said Richard K. Green, director of the University of Southern California’s Lusk Center for Real Estate. “Dialing it back to $625,500 is a perfectly reasonable thing to do.”
Source: The Wall Street Journal, Nick Timiraos (09/23/2010)
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Fannie, Freddie in the Home-Selling Business
Fannie Mae and Freddie Mac repossessed more than 191,000 homes during the first six months of 2010, twice as many as a year earlier.
The mortgage financiers must act carefully to avoid flooding the market with foreclosures, which tend to depress neighborhood home prices in the process.
As an alternative, Fannie Mae has launched a pilot “lease-and-hold” program in which foreclosures are rented rather than sold; the move could pose challenges, however, as the firm takes on the new role of property manager.
Source: The Wall Street Journal, Nick Timiraos (09/17/10)
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Regulator: Banks Should Help Bail Out GSEs
Banks should assume some of the cost for bailing out Fannie Mae and Freddie Mac because they sold them bad mortgages, Edward DeMarco, the acting director for the Federal Housing Finance Agency, said Wednesday.
In written testimony submitted for a House Financial Services subcommittee hearing, DeMarco said banks have a legal obligation to buy back bad loans and the government may take further action to force buybacks if, “discussions do not yield reasonable outcomes soon.”
The top Democrat on the committee, Rep. Paul Kanjorski, agreed that banks must share the blame. “We must begin to think about approaches for recouping taxpayers’ money in the long run,” he said. “We found a way to pay for the savings and loan crisis, and we can surely find a way to recover the costs associated with this crisis.”
Source: The Associated Press, Alan Zibel (09/15/2010)
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Fannie Mae to Prohibit ‘Appraisal Cutting’
Fannie Mae is banning a common practice known as “appraisal cutting,” starting next week.
When lenders selling loans to the firm challenge a valuation, the underwriter will have to contact the appraiser directly; if the lender is unable to settle the dispute, its only option will be to order a second appraisal.
Lenders will be unable to simply cut the value of the appraisal or shop around for the best appraisal.
Source: American Banker, Kate Berry and Marc Hochstein (08/26/10).
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Geithner Calls for Cooperation to Modify GSEs
Treasury Secretary Timothy Geithner told attendees at a housing summit on Tuesday that the U.S. government will continue to guarantee mortgages, but its role will be revised to avoid making it a primary backer if Fannie Mae and Freddie Mac face another meltdown.
Geithner urged Democrats and Republicans to work together to rebuild Fannie and Freddie to avoid another crisis. He called remaking the mortgage market one of the most important and complicated economic policy problems the U.S. faces today.
“There is nothing we can do to decrease the significant losses Fannie and Freddie incurred ahead of this crisis. All we can do is to minimize the risk that they get worse,” Geithner said.
Source: The Wall Street Journal, Nick Timiraos (08/17/2010)
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Decision on Fannie and Freddie May Come Soon
Government and banking experts meet next week to decide the future of Fannie Mae and Freddie Mac.
The likeliest solution is a complex one. The Mortgage Bankers Association is proposing a system where risk-based fees on a class of mortgage-backed securities would be charged in exchange for a government guarantee against losses.
Whatever the outcome, it is unlikely that Fannie and Freddie will be able to pay back the nearly $150 billion in taxpayer bailout money that they have received since 2007.
Source: Reuters News (08/12/2010)
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Fannie, Freddie Will Not Forgive Underwater Debt
Despite rumors to the contrary sweeping Wall Street and Washington, D.C., the White House says it is not planning to order Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of people who owe more than their homes are worth.
“The administration is not considering a change in policy in this area,” said Treasury spokesman Andrew Williams.
Mortgage bond prices stabilized after that rumor was quashed.
Source: Reuters News (08/05/2010)
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Fannie Mae: No More Overly Easy Loans
Fannie Mae CEO Michael Williams said Wednesday that Fannie’s current book of business is its strongest in 10 years.
In a speech to the group Women in Housing and Finance, Williams said Fannie is emphasizing long-term, fixed-rate loans based on more accurate appraisals to borrowers with higher credit ratings who can thoroughly document their income.
Williams called the tougher standards “the new realism” in the housing market that will make owning a home more challenging.
“Step-by-step, we are putting in place a new foundation for our industry,” he said. “It’s a foundation based on the right lending standards and on a broad re-examination of what constitutes sensible risk.”
Source: The Wall Street Journal, Jessica Holzer (07/28/2010)
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Fannie Mae Reviews Last-Minute Credit Checks
Fannie Mae announced last week that it is reviewing the rule it put in place earlier this year requiring lenders to do a second credit check shortly before closing.
The goal of the rule is to identify new debt that might undermine an applicant’s ability to pay, but for both home buyers and lenders, the second check is problematic. The search can uncover a short-term debt — medical bills that insurance is likely to pay — that would nevertheless derail a purchase.
“We keep telling people: ‘Don’t open new accounts. Don’t close existing accounts. Don’t do anything whatsoever that will alter your credit situation,’” says Eric Gates, a mortgage broker for Apex Home Loans. “But there will be people who can’t avoid increasing their credit card balances, or already have, and that’s where the problems will crop up.”
Lenders are particularly concerned about the rule because Fannie can require them to buy back loans in default up to two years after closing if there is evidence that the borrower had more debt than was disclosed at the time of closing.
Source: Washington Post, Dina ElBoghdady (07/16/2010)
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Fannie Mae Needs $8.4 Billion More
After posting a first-quarter net loss of $11.5 billion, Fannie Mae has petitioned the federal government for an additional $8.4 billion in aid.
The government-sponsored enterprise’s 11th consecutive quarterly loss would have been deeper without accounting changes that reduced its deficit. Fannie Mae now has recorded total losses of almost $145 billion, or nearly twice its profits for the previous 35 years.
Source: Wall Street Journal, Nick Timiraos (05/11/10)
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Fannie Adds Incentive to Avoid Foreclosure
Beginning in July, Fannie Mae will allow financially troubled home owners to complete a “deed in lieu of foreclosure” or a short sale and be eligible to apply for a new Fannie-backed mortgage in two years.
Currently, borrowers who have completed a deed-in-lieu must wait four years to apply for a loan that Fannie will purchase. Home buyers who go through foreclosure must wait five years.
All these waiting periods can be reduced further, if the potential buyer can show extenuating circumstances. “We are beginning to think about post-recession, how you address borrowers who became unemployed through no fault of their own … and now deserve the right to re-enter the housing-finance system,” said Federal Housing Association Commissioner David Stevens.
Source: The Wall Street Journal, Nick Timiraos (04/26/2010)
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Fannie Survey Finds Home Owners Are Skeptical
The housing crisis has changed how Americans view homeownership, according to a survey of public attitudes by Fannie Mae.
The number of people who view homeownership as a safe investment declined from 83 percent in 2003 to 70 percent in 2009. In addition:
* 48 percent of those surveyed said banks should foreclose on people who don’t pay their mortgages. 53 percent blamed borrowers – instead of banks – for taking out bigger loans than they could afford.
* 15 percent of respondents said it is acceptable for borrowers who are underwater to walk away.
Source: The Washington Post, Renae Merle (04/06/2010)
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White House Props Up Fannie and Freddie
More than a year after the global financial meltdown, Fannie Mae and Freddy Mac remain at the center of the U.S. government’s efforts to keep real estate afloat. So far, the government has given the two companies a total of nearly $111 billion to buy mortgages originated by others, keeping some as investments and repackaging other for sale to investors as securities.
Together, Fannie and Freddie fund 90 percent of U.S. mortgages. They also have reignited lending by state and local housing-finance agencies by guaranteeing $24 billion in debt. And they are supporting the apartment sector by lending to builders and buyers.
The situation is unlikely to change soon because by relying on Fannie and Freddie, Obama can bypass Congress. The government is “running Fannie and Freddie as an instrument of national economic policy, not as a business,” says Daniel Mudd, who was forced out as Fannie Mae’s CEO in September 2008 when the government took control.
Assistant Treasury Secretary Michael Barr defends the status quo, saying that Fannie and Freddie are “owned by the taxpayers in the middle of the biggest housing crisis in 80 years” and the administration’s actions have been “prudent” and “consistent with taxpayer protection.”
Source: The Wall Street Journal, Nick Timiraos and James R.
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Fannie, Freddie Go After Bad Loans
Accountants at Fannie Mae and Freddie Mac are auditing mortgage files to uncover loans with improper documentation about a borrower’s income, and then forcing banks and savings and loans to buy the loans back.
Freddie required lenders to buy back $2.7 billion of loans in the first nine months of 2009. Fannie Mae won’t disclose its figures, but the mortgage trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.
One result is that banks are underwriting mortgage loans even more carefully than they were last year, which can further slow the lending process.
“If you’re being hit with a lot of repurchases very suddenly, the easiest thing to do is to tighten your standards rapidly,” said Glenn Boyd, a Barclays analyst.
Source: The Wall Street Journal, Nick Timiraos (01/30/2010)
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Fannie to Offer Closing Cost Aid on Foreclosures
Fannie Mae, the largest provider of residential home funding in the United States, announced Friday that it would pay the closing costs on purchases of foreclosed homes in its inventory.
The government-controlled company said buyers of qualified properties will get up to 3.5 percent in closing costs, or an equivalent amount for the purchase of new appliances.
The goal of Fannie is to clear out the nearly 50,000 properties it has in inventory— listed on HomePath.com, the Web site created by Fannie Mae last year to sell the growing number of foreclosed homes.
“Attracting qualified buyers to the market and reducing inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover,” said Terry Edwards, executive vice president for credit portfolio management, in a statement.
Source: Reuters News, Al Yoon (01/28//2010)
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Fannie Mae: New Affordable Housing Options
Fannie Mae announced Tuesday that it has launched several initiatives designed to stabilize neighborhoods and promote purchases by owner occupants and low-income buyers.
Fannie Mae’s “First Look” initiative offers buyers who intend to live in the home, particularly low-income buyers, an opportunity to make an offer during the first 15 days the property is on the market. Investors can only make an offer after the first 15 days have passed.
Other programs aimed at stabilizing neighborhoods include:
* Deposit Waivers. Fannie Mae will waive the earnest money/deposit requirement for public entities using public funds to purchase a Fannie Mae-owned property. Individual home buyers who have qualified for public funds and want to purchase a Fannie Mae-owned property do not have to meet the usual earnest money/deposit requirement either. Deposits for these buyers can be as low as $500.
* Reserved Contract Period. Upon receipt of an acceptable offer, buyers have the ability to renegotiate their offer after obtaining an appraisal.
* Extra Time for Closing. Buyers receive up to 45 days to close – 15 days more than is usually permitted for purchases of Fannie Mae-owned properties.
Source: Fannie Mae (11/24/2009)
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Credit Disputes Could Bar Home Loans
Mortgage loan applicants with a credit dispute on their records may find it impossible to get a loan even if they have a score above 800 and a large down payment, warn consumer watchdogs.
The problem stems from a Fannie Mae policy that requires lenders to hand-underwrite these loans because that practice makes it harder for scammers to use the credit dispute law to hide bad credit experiences.
Denying people who are good credit risks a loan is frequently an unintended consequence, says Christopher Cruise, a mortgage originator and a founder of Responsible Loan Officers. “There’s no question – when there are lots of other applications and business is good,” applications requiring extra time and research “just aren’t going to move.”
The policy is “extremely unfair to honest consumers who are simply doing what they should – challenging misinformation,” says Evan Hendricks, whose newsletter Privacy Times outlined Fannie Mae’s policy in a recent report.
Fannie Mae says it is reviewing the policy and may change it.
Source: Washington Writers Group, Kenneth R. Harney (10/25/2009)
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FHFA Gets More Funding
The Federal Housing Finance Authority (FHFA) will have a $139.3 million budget for fiscal year 2010, up 15 percent from a year ago. This increase will help the watchdog in supervising Fannie Mae and Freddie Mac.
The FHFA says the two mortgage financiers have refinanced 3.2 million loans this year, and its data indicates that the volume of loan workouts is tied to average mortgage rates. However, the volume of mortgage modifications is still below expectations.
Source: DSNews, Adam Weinstein (10/05/2009)
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Mortgage Bankers: End Fannie and Freddie
The Mortgage Bankers Association is urging the U.S. government to replace Fannie Mae and Freddie Mac with private companies.
The Obama administration is considering a couple of options, including shutting them down or merging them into another federal agency.
The mortgage bankers would replace Fannie and Freddie with federally regulated private companies that would buy loans, sell them as bonds with their own guarantee, and pay the government for reinsurance.
Jaret Seiberg, an analyst at Washington Research Group, said in a research note that the “odds are high for enactment” for the Mortgage Bankers Association’s proposal because this would create a practical way to keep mortgage rates low.
Source: The Associated Press, Alan Zibel (09/02/2009)
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Freddie Mac gets another $6.1B from government
By STEPHEN BERNARD Associated Press NEW YORK — Battered mortgage giant Freddie Mac received $6.1 billion in new funds from the Treasury Department to help offset its mounting liabilities, according to a regulatory filing submitted Wednesday. The company could also be close to naming a new, permanent CEO, according to a report in The Wall [...]
Mortgage Update: Jumbos Remain Elusive
At a time when some mortgage products are showing signs of life, jumbo mortgages are hard to get and expensive, making it difficult for many would-be move-up buyers to take action. What to do? Since the credit crunch hit about two years ago, many lenders have all but abandoned jumbos, which are too big for [...]
Changes in reverse mortgages worry industry.
Almost daily, the reverse mortgage industry is changing, and it’s worrying plenty of people.
For years, reverse mortgages have been reliable, a way for seniors to live off the equity in their homes as they age. While complicated, these loans have been highly regulated in terms of fees and rate disclosures. Geared to homeowners age 62 and above, they provided peace of mind because rates and fees usually were set when the loan process started.
But now, reverse mortgage veterans like John Smaldone in Maryville, Tenn., are concerned about that some sudden changes by Fannie Mae that allow margins to fluctuate almost daily until the funding process is complete. These adjustments can confuse seniors and cause them to question whether they are getting fair treatment.
Fannie Mae – the largest financier in the U.S. mortgage industry – is trying to attract more money to the reverse mortgage market by increasing the amount lenders can make on selling the loans. But raising fees and allowing rates to change can lower the amount of money senior homeowners can borrow. It also can increase the fraud risk as competition for their business increases. More Details
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Fannie taps lifeline after $59B in losses.
Mortgage finance company reports $25 billion quarterly loss and receives $15 billion from the Treasury Department.
NEW YORK (CNNMoney.com) — Hammered by the ailing housing market, mortgage finance giant Fannie Mae said Thursday it would tap its lifeline from the Treasury Department after reporting $58.7 billion in losses for 2008.
The company, a crucial source of funding for mortgage lenders, said it would draw down $15.2 billion of its $200 billion federal line of credit. In return, the government will receive preferred shares. MORE.
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Housing fix leans on troubled firms.
NEW YORK(CNNMoney.com) — Fannie Mae and Freddie Mac won’t be leaving the federal government’s nest anytime soon.
President Obama is leaning heavily on the teetering mortgage finance titans to help stabilize the housing market, even as it pumps hundreds of billions of dollars into them to keep them afloat.
As the housing crisis deepens, the question of the companies’ long-term future has been set aside.
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Fannie Mae won’t evict renters in foreclosures Will sign new leases with tenants while properties are up for sale
WASHINGTON – Mortgage finance company Fannie Mae said Tuesday it has adopted a policy allowing renters to remain in their homes even if their landlord enters foreclosure.
Full story.
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