Home Loan Giants Fannie & Freddie $126 BILLION Loss
Kenneth Posner, author of “Stalking the Black Swan: Research and Decision-Making in a World of Extreme Volatility,” talks with Bloomberg’s Lori Rothman about Fannie Mae and Freddie Mac. Fannie Mae, the government-backed mortgage company under conservatorship, was toppled by conflict between its mission to foster homeownership and profit demand it faced as a publicly traded company, former regulators said
Escondido California real estate
Survey Looks at Sentiment Toward Housing
Fannie Mae
A just released Fannie Mae National Housing Survey, conducted between December 2009 and January 2010, polled homeowners and renters to assess their confidence in home ownership as an investment, the current state of their household finances, views on the U.S. housing finance system and overall confidence in the economy.
Fannie Mae and Freddie Mac – Walking Dead
Goodbye and good riddance says Rep. Barney Frank to Fannie Mae and Freddie Mac. In his opinion, both mortgage agencies need to be closed for good. Once that’s accomplished, the housing finance system can be rebuilt right.
Fannie Mae Hikes Mortgage Credit Scores
San Diego home
Fannie Mae has increased the minimum borrower credit score from 580 to 620.
Brian Faith, a spokesperson at Fannie, confirmed the minimum hike, adding that the adjustment reflects a careful analysis of borrowers ability to repay their mortgage obligations over the life of the loan. Our experience with recently delivered loans with credit scores below 620 is that they reached a level of serious delinquency at a rate approximately nine times higher than other acquisitions during the same period, Faith said in a statement. Read more 
U.S. Mortgage Giants Fannie Mae and Freddie Mac Are Broke
San Diego home
America is relying on Fannie Mae & Freddie Mac to bail out the troubled housing market, yet Fannie and Freddie have needed bailouts of their own. Bose George, an analyst at Keefe, Bruyette & Woods, has reported that the quasi government mortgage giants have zero value to common shareholders. After nearly $100 billion government bailout, many believe these two will need the full $400 billion that the Treasury has already pledged if they are to survive. Read more
Fannie Mae and Freddie Mac Refinance Loans up to 125% of Value
Fannie Mae
If bad loans got us into this mess, can we expect more bad loans to get us out? The answer is YES if you are running the Fannie Mae or Freddie Mac government refinance programs. In a recent press release it was announced that the two government owned agencies will now refinance loans up to 125% of the current home’s value!
Did we not learn anything from the current, and continuing), housing bust? All facts from the mortgage industry and government point to the fact that mortgage default rates take a huge spike upwards with high loan to value loans.
I would venture to say that many of the mortgage debtors (in trust deed states) may not realize that by refinancing through this program, they will be going from a non-recourse loan to recourse refinancing, in many cases.
My bet is that actions like this will give a false sense of recovery for awhile, only to have us fall further in the future, much like the stimulus money is currently doing.
In his statement FHFA Director Lockhart said, “The higher LTV refinancing will allow more homeowners to strengthen their finances.” Do you really believe this? If the government really wanted people to stay in their houses, they would allow them to go into foreclosure and help them find alternative housing. Moving them into a 125% LTV recourse loan is setting them up for disaster and setting taxpayers up to take on the resulting new losses.
Perhaps the government is not being 100% honest in their touting this 125% refinancing program as a way to help people stay in their houses. In reality, it may actually be a way to help banks keep from writing down assets while they earn enough money to increase their capital base.
Living in California, I’m a little disappointed in the fact that our state tax and spend government did not come up with a comparable plan before the Feds. The fact that California has no budget, is issuing IOU’s and has upwards of a 26 billion deficit is no excuse. Just a few months ago California passed a new law giving new home buyers a credit of 5% of the purchase price up to $10,000. California set aside 100 million for this program. Now that the $100 million is almost exhausted, two new bills are pending in Sacramento to to double or triple the original $100 million.
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