Fannie Mae Mortgages
Fannie Mae mortgages have helped people obtain the dream of homeownership since 1938. This entity originated at the request of President Franklin Roosevelt who wanted to make certain every U.S. citizen had the opportunity to buy affordable housing.
Fannie Mae mortgages make up about half of the real estate loans currently held in the U.S. It's important to note that Fannie Mae doesn't originate loans. Instead, they buy loans from banks in order to free up credit so banks can lend more funds.
Up until 1968, Fannie Mae was part of the U.S. government. At that time, it evolved into a shareholder-owned private company that received the status of being a government-sponsored enterprise (GSE).
Fannie Mae continued to be a profitable enterprise by purchasing home mortgage loans, packaging them with other types of security-backed loans, and selling the securities to investors.
Many people blame Fannie Mae for the mortgage crisis that began in 2007. Due to the fact that many Fannie Mae mortgages were subprime loans, the enterprise was on the brink of bankruptcy and eventually fell into conservatorship and received billions of bailout money.
While there is plenty of speculation that Fannie Mae should have been allowed to fail, the fact of the matter is the country couldn't afford to let that happen. Since Fannie Mae and Freddie Mac hold almost half of the mortgages, the industry would have collapsed and the foreclosure problem would be even worse than it already is.
Regardless of how people feel about Fannie Mae, the government has agreed to continue infusing funds to ensure the GSE can continue providing affordable housing to Americans. Although both Fannie Mae and Freddie Mac have come under substantial scrutiny, it appears as if positive changes are occurring.
In recent months, several Fannie Mae loan mortgage programs have been established to not only help people buy houses, but also save their home from foreclosure. Available options include: mortgage refinance, loan modification, real estate forbearance, deferred payments, and deed-for-lease.
Most of these programs are offered through Making Home Affordable; a program established by the Obama Administration in 2009. Homeowners have to meet eligibility criteria and submit applications through their lender.
While most MHA programs require applicants to hold Fannie Mae-backed mortgages, homeowners might qualify if their lender participates in the program. Regardless of who owns the loan, most homeowners find the process confusing and intimidating. A good solution for determining if properties qualify for Home Affordable programs is to obtain HUD housing counseling.
A relatively new program is Fannie Mae's deed-for-lease. Homeowners that want to remain in their home, but can no longer afford mortgage payments might be able to transfer their property deed to the bank and lease their home for 12 months or longer. This is a good option for people that have children enrolled in school.
Individuals that want to buy a house, but don't have pristine credit or large down payments, should investigate Fannie Mae Homepath properties. These bank owned foreclosures are sold at discounted rates to individuals and real estate investors.
Buyers can apply for financing through Home Path Mortgage or a lender of their choice. Many people prefer Home Path Mortgage because this program offers incentives such as no mortgage insurance and low down payment requirements.
Due to the fact that many of the properties sold through Fannie Mae Homepath are foreclosure houses it's smart to look into HUDs Neighborhood Stabilization Program that offers grant money for renovation. NSP grants are provided to individual buyers and real estate investors that buy houses in areas with excessive foreclosure rates.
Regardless of the negativity surrounding Fannie Mae mortgages, chances are high this GSE will be around for a long time. Therefore, qualified applicants might as well take advantage of available home buying and foreclosure prevention programs.
We provide an extensive Fannie Mae mortgages article library, as well as information about conventional home loans and creative financing strategies. Here you'll find information about ways to stop foreclosure; how to buy a house with less than perfect credit; and government sponsored programs that provide grant money.
Tagged: Fannie Mae Mortgages
Published on October 11, 2011 at 03:23 AM