Breaking News! - US Govt Takes Over Fannie Mae and Freddie Mac
Sep 7th, 2008 | By cboatright | Category: Short Sale News, Short Sale VideoUS Government takes over mortgage giants Fannie Mae and Freddie Mac
Resource: News: Yahoo.com
Treasury Secretary Henry Paulson, Jr. speaks during a news conference in AP – Treasury Secretary Henry Paulson, Jr. speaks during a news conference in Washington, Sunday, Sept. 7, …
WASHINGTON – The Bush administration seized control Sunday of troubled mortgage giants Fannie Mae and Freddie Mac , aiming to stabilize the housing market turmoil that is threatening financial markets and the overall economy.
Treasury Secretary Henry Paulson is betting that providing fresh capital to the two firms will eventually lead to lower mortgage rates, spur homebuying demand and slow the plunge in home prices that has ravaged many areas of the country.
The huge potential liabilities facing each company, as a result of soaring mortgage defaults, could cost taxpayers tens of billions of dollars, but Paulson stressed that the financial impacts if the two companies had been allowed to fail would be far more serious.
"A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance," Paulson said.
But more importantly, "Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great …read full story
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What are your thoughts about how this will affect short sales? I left my opinion on the video shown above.
I don’t really see this making things any worse or better for short sale negotiation professionals.
Shoring up the GSA’s is all fine and dandy, but how is it going to effect any change? Is the government going to tell them to restructure their ridiculous 90% to 92% of the BPO net figure requirement?
A Big Brother takeover isn’t going change the short sale processes for these two anytime soon and without changes on their policies this is just another news story.
The other things that these banks need to do is remove across the board the whole “deed restriction” thing that prevents the home from being resold in the first 90 days after a sale. It’s very similar to the FHA guideline except that it only applies to homes owned by Fannie/Freddie that are being sold REO while the FHA thing applies to ALL homes because it’s a Buyer stip.
I am NOT excited about this news, because I just don’t see how it benefits those that are faced with the terrible choice of : Foreclosure or Short Sale? And if Short Sale, what are the guidelines to get it done?
I’m also worried that Fannie/Freddie may start adopting some of the FHA stuff. Like the 90-Day seasoning thing for all buyers! That would kill just about every Retail Short Sale Double-Close Quick-turn.
I think this is going to give Loss Mitigation companies a larger scope to help homeowners..Most Loss Mit workouts end in shortsales as we already know and I think this will widen shortsales in the future.
I hope it helps homeowners remain in their homes…but the truth is that this is all just a band-aid…
Mike