Question about Freddie Mac and Fannie Mae

I received many comments and calls about my previous blog.   There were 3 questions that kept coming up, so I thought I would touch on them this evening.

Who is Fannie Mae and Freddie Mac?

What do they do?

How are they involved in the foreclosure Process?

Both Fannie Mae and Freddie Mac do not originate loans.   They are not the primary lenders. They purchase these loans on the secondary market.   They buy these loans in packages.   This results in banks having more money to lend out to lenders.   Fannie Mae and Freddie Mac add liquidity to the market.  

Nationwide, Fannie Mae and Freddie Mac own 1 out of 6 mortgages.  

The Freddie Mac Foreclosure Unit opperates  under the name HomeSteps.   If you are looking at one of their foreclosures,  below is a short list of what you might expect to see.

1.   As the buyer, you should receive HOA documents.

2.   They do not  dump their properties.   Most of thier homes have been repaired and should be in good condition.   This is important because they want property values to stay high, and so do you!    If you live next to a foreclosed property  that isn’t maintained, the value of your home declines as well.

3.   They have a mandatory set of days a home must be on the market before accepting offers.   This protects the buyer and makes it a level playing field for all who want to place a bid on a property.    

4.   Once one of their homes goes  into foreclosure,   a NEW market price is placed on the property.   The price has nothing to do  with the past mortgage.

5.   They do not work with  escalation  clauses.   When there are  multiple offers there are clear defined rules in place that go into effect to protect the buyers.

This  list can go on and on.    Again,  if you want to discuss these topics more or just have questions, give me a call.  

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