Condominiums And Barney Frank

Barney Frank is trying to get Fannie Mae and Freddie Mac to be more lenient on condos.  And although this article brings up the fact that he is the same person who may have contributed to the housing meltdown (along with many others) I feel as though he is right on this one.  The current guidelines are so strict right now on condos that it is causing prices to drop even more than they should have.  That is because if you cannot get financing in a condo project the only way to buy a unit in the building is cash at blow out prices, way below market value.  We are especially feeling this in Broward and Miami-Dade Counties. 

“Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to “roll the dice” in the name of affordable housing. That didn’t turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity — with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.

You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.”

http://online.wsj.com/article/SB124580784452945093.html 

Fannie & Freddie To Be Warehouse Lenders?

This is very interesting since Warehouse lending has been cut back.  According to The WSJ, the regulator of Fannie Mae and Freddie Mac is considering giving the government-backed mortgage companies another role: helping to finance small mortgage banks.  A spokeswoman for the regulator, the Federal Housing Finance Agency, said it is looking at ways that the two companies might help revive the market for so-called warehouse loans, which are loans made to mortgage banks. This possible role for Fannie and Freddie is the latest sign of how they are being used increasingly as instruments of government policy rather than corporations focused on shareholder returns.

http://online.wsj.com/article/SB123837208039067699.html#mod=todays_us_page_one

Freddie Mac Reports Loss, Has Restrictions On Refinances

The WSJ reported that Home-mortgage company Freddie Mac reported a loss of $23.9 billion for the fourth quarter and said it will need a $30.8 billion injection of capital from the U.S. Treasury.

Meanwhile, a new mortgage-refinancing program offered by Freddie as part of the Obama administration’s foreclosure-prevention plan doesn’t allow borrowers to shop around for the lowest fees. Brad German, a spokesman for the government-backed provider of funding for mortgages, said any borrower with a Freddie-backed loan who wants to refinance under the program needs to do so through the company that services his current loan. Loan servicers, typically owned by lenders, collect monthly payments.

Fannie Mae, said borrowers with Fannie-backed loans will be able to seek refinancings under the program from more than 30,000 lenders nationwide. While Fannie is letting borrowers shop around, those deemed a higher risk are hit with fees that can total 3% or more of the loan balance. Freddie’s maximum fee on these refinancings is 0.25%.

http://online.wsj.com/article/SB123679936260698821.html

Fannie’s Modifying Loans

I keep reading more and more articles about how lenders are modifying more loans, the Hope for Homeowners loans, Fannie/Freddie streamlining modifications, etc. but it sure doesn’t seem they are doing it as much as they talk about it.

Fannie Mae has reached an agreement to work with one of its former critics, Neighborhood Assistance Corp. of America, to prevent foreclosures by reworking home mortgages to make them easier to afford.

http://online.wsj.com/article/SB123328152873231973.html?mod=todays_us_page_one

Fannie/Freddie Slow On Evicting Tenants

This is a very interesting article.  Although Fannie/Freddie are in the mortgage business are they doing the right thing by being landlords?  You can make that call.

Fannie Mae and Freddie Mac, currently the largest holders of U.S. home mortgages, are fast becoming big landlords. But some real estate agents say the firms’ unwillingness to evict tenants from properties they inherit could slow the housing market’s recovery.

Freddie Mac, bowing to pressure from affordable-housing advocates, said Friday it would let renters remain in homes lost to foreclosure. The mortgage-finance company will begin next month offering monthly leases to tenants, following the lead of Fannie Mae, which rolled out a similar policy earlier this month. Both companies said Friday they would halt tenant evictions in February.

The policies are an about-face from the two companies’ previous practice when, like most lenders and mortgage companies, they routinely evicted tenants in homes that fell into foreclosure, even when residents were current on their rent.

Tenant advocates have called on private lenders to follow Fannie and Freddies’ lead, noting that tenants have been swept up in the foreclosure crisis. Lenders should “not be kicking a tenant out in the middle of a recession who has upheld all the terms of their rental agreement,” said Jim Carr, operating chief of the National Community Reinvestment Coalition. “It represents a really important and good-faith effort not to compound the misery of these families.”

http://online.wsj.com/article/SB123336843063635637.html?mod=todays_us_page_one