In the latest sign that the worst might be over for the battered US housing market, the two government-controlled mortgage finance giants, Fannie Mae and Freddie Mac, this week reported some of their best quarterly results since the real estate collapse.
On Wednesday, Fannie Mae posted second-quarter net income of $5.1 billion. That is up from $2.7 billion in the first quarter of this year and an improvement from a net loss of $2.9 billion in the second quarter of last year. Fannie requested no additional money from the Treasury and said it would pay a $2.9 billion dividend to taxpayers.
On Tuesday, its brother organization, Freddie Mac, announced second-quarter net income of $3 billion, up from $577 million in the first quarter and a net loss of $2.1 billion in the year-ago second quarter. It also requested no additional federal aid and said it would pay a $1.8 billion dividend to the federal government. Read More.
The Federal Housing Finance Agency announced Tuesday that after several months of mounting pressure from the Obama administrator and lawmakers that the mortgage giants it regulates, Fannie Mae and Freddie Mac, will not lower the mortgage principal of underwater home owners. Its decision quickly drew criticism.
The FHFA insists that through its own analysis it has concluded that reducing the mortgage principal of struggling home owners will not help prevent foreclosures nor save taxpayers money in bailout money to the GSEs. Read More.
The Federal Housing Finance Agency announced a new policy to speed up the process that mortgage servicers use to handle short sales, deeds-in-lieu, and deeds-for-lease for mortgages that are backed by Fannie Mae and Freddie Mac.
The FHFA, the regulator of Fannie and Freddie, says the new policy includes a revised timeline that will require mortgage servicers to respond to a request for a short sale offer within 30 days. Servicers also will be required to make a final decision on the short sale offer within 60 days. Read More.
This topic seems to cause quite the debate among the masses. What are your thoughts?
Fannie Mae and Freddie Mac could save $1.7 billion if they forgave principal on some distressed mortgages, new analysis shows.
The Federal Housing Finance Agency— which regulates the mortgage giants — may decide in the next few weeks about whether to use principal forgiveness as a foreclosure prevention tactic, said Edward DeMarco, acting director of the FHFA while speaking Tuesday at the Brookings Institution.
The FHFA, and DeMarco, have come under pressure to allow Freddie and Fannie, which own or guarantee 60% of all home loans, to do principal forgiveness. Read More.
A variety of encouraging indicators suggest the housing market is awakening, “much like the garden flora reemerging from their winter dormancy,” Frank Nothaft, Freddie Mac chief economist said Wednesday.
In the agency’s latest economic outlook report, Nothaft predicts stronger economic growth in 2012 will translate to a reduction in the unemployment rate below 8.3%. He expects 30-year fixed-rate mortgages to gradually increase throughout the year to 4.5% and new rental construction to reach heights not witnessed since 2005 — if the current pace is maintained, that is. Read More.
The average U.S. rate on the 30-year fixed mortgage fell back below 4% this week, staying near historic lows.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.99% from 4.08% last week. Last month, the rate touched 3.87%, the lowest since long-term mortgages began in the 1950s.
The average rate on the 15-year fixed mortgage also fell, to 3.23%. That’s down from 3.30% last week and above the record low of 3.13% hit earlier this month. Read More.
The recommendations came in a new strategic plan for Fannie and Freddie submitted to lawmakers Tuesday by the Federal Housing Finance Agency, which has overseen the companies since they were put into government conservatorship in 2008 to avoid their failure.
Fannie and Freddie have almost single-handedly kept the housing finance market afloat in recent years. Together, they guarantee about $100 billion a month in mortgages, an amount that represents about 75 percent of all new home loans. Read More.
Since the market downturn several years ago lawmakers in Washington have been talking about reforming the secondary mortgage market but nothing has come out of Congress yet. This year, though, a lot of progress is expected to be made toward reform, so it will be especially important for real estate brokers and sales associates to stay engaged in what’s happening, particularly this spring. Read More.
Mortgage finance firm Freddie Mac will give unemployed borrowers a break on their mortgage for up to one year.
“These expanded forbearance periods will provide families facing prolonged periods of unemployment with a greater measure of security by giving them more time to find new employment and resolve their delinquencies,” said Tracy Mooney, senior vice president of single-family servicing and REO at Freddie Mac. Read More.
Bank of America is looking at a new program to rent a home back to the borrower after foreclosure.
In February, BofA formed a division to handle the servicing for delinquent mortgages, loans no longer being written, and to sort out outstanding representation and warranty claims. Currently, more than 35,000 employees at the bank are sorting through 1.1 million loans 60 days delinquent or worse, according to its third-quarter financial statement.
The Federal Housing Finance Agency is working on an REO rental program for Fannie Mae and Freddie Mac. It received more than 4,000 ideas on how to do it. Read More.