Fannie Mae and Freddie Mac have announced they will buy back mortgages which are delinquent:
The two companies are repurchasing mortgage loans for which borrowers have missed at least four months of payments. At the end of last year, Fannie had about $127 billion of such loans, while Freddie Mac had about $70 billion.
Now they are doing this supposedly because it's cheaper. They guarantee the underlying securities and have to pay interest on those MBS (bonds) and it's turning out to be cheaper to just buy the bad loans back.
Yet, Bloomberg reports:
Investors would lose about $12.5 billion in forgone interest.
Bond holders pay more than the face value due to expected interest payments.
It seems some accounting rules changed at the end of the year, otherwise they would have needed more capital.
Accounting-rule changes are forcing all mortgages in Fannie Mae and Freddie Mac securities onto their balance sheets and limiting the financial impact of actual repurchases to the companies.
But.....Fannie and Freddie got an unlimited bail out at the end of the year.
Note that the actual homeowners, don't get a break at all, it's all about underlying securities, investments and toxic waste...and I guess once again...making sure no one takes too bad of a haircut, except for the homeowners of course.
Unfair!!!
Why are these GSEs using our money (TARP) to buy these mortgages? Mine is under water, but not delinquent, and I would like to buy it at fair market value. However, since it is a Fannie Mae mortgage, they won't negotiate. Why should they -- they have my money (and yours).
Frank T.
Frank T.
principle reduction denied
in every form and I have no idea why beyond keeping the ponzi scheme going.
I mean financial advisers are now recommending people purposefully default on their mortgages.
None of that would be going on if they would take a hair cut on the principle.
Rebel has been talking about this quite a bit. I think we need to run a spreadsheet. Let's let every homeowner take a 50% principle reduction, whether they have a mortgage or not...
and see what that tally is financially. Is it well below even the Fannie/Freddie losses?
According to FRB Z.1 - Flow of Funds
Outstanding household mortgage debt: $10.29 trillion.
FRB: Z-1 Flow of Funds
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
that's about 15:1 ratio to CRE
so, CRE is smaller really, although as COP notes has more implications for small business and the loan structures are different.
Do you notice we are getting people posting their personal horror story in anonymous comments on EP?
I think we need a "what to do if you're desperate and in despair over your mortgage" post.
It's clear people are routinely getting jacked around and they are obviously at the "end of their ropes" on what to do.
WELLS FARGO HOME MORTGAGE& FREDDIE MAC
After borrowing $6,625.25 from my mother to come out of foreclosure.
Wells Fargo says Freddie Mac denied a loan modification because I have too much equity in my home.
Wells Fargo visited my homes 3 times and always knew I had equity.
Today, Rene (Executive Office of the President of Wells Fargo) suggested I sell my house buy a condo or a smaller home (my house is 900 sf) or try to refinance with Wells Fargo.
I called the refinance dept and they said they wouldn't refinance because I have been late on my mortgage payments.
They also said Freddie Mac could extend the loan out 40yrs but then said you wouldn't do that.
Why isn't TARP money being spent to keep long term older homeowners in their homes.
Why can't you reduce my 8.62% mortgage or extend my mortgage. I want to stay in my house.
I asked Wells Fargo for the correspondence between Freddie Mac & Wells Fargo which they refused to send me saying it's confidential.
I want to see in writing why my loan modification was denied. I also wanted to make you aware of Wells Fargo's refusal to refinance my $52,000 mortgage on a $200,000 home.
It seems unbelievable that I've paid my mortgage on time from 1992 until last year (due to lack of work), now I have a steady job, have almost $150,000 equity in my home and neither Freddie Mac or Wells Fargo will refinance my home.
NORFOLK MASS HOMEOWNER SINCE 1979
Have you considered a credit union or community bank
Look around. You are not required to refinance with Wells Fargo - quite frankly screw them. Credit unions are great options but you have to be a member first typically by becoming a depositor. Community banks may understand local market better than a big financial conglomerate like Wells Fargo.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
fannie loan number not bank number?
Does anybody know how to obtain the fannie mae loan number? Im told it is a different number than my mortgage loan number.Thank you ..
Google is your friend
Their contact phone numbers are right on their website, here and if a corporation isn't offering them, usually someone posted their number on the web somewhere. You just put it into a search engine, such as Google to find it.