In 2003, Freddie Mac was fined $125 million and was forced to restructure their management team. This was a result of under-reporting their earnings. They said that they earned $5 billion from the years 2000 through 2002.They suffered another fine in 2006 of $3.8 million as a result of illegal campaign contributions. Freddie Mac raised money for political candidates who would later use their influence in certain decisions that would affect Freddie Mac. U.S. law prohibits such practices by organizations, corporations, and businesses.

Freddie Mac was sued by a shareholder in 2007. This brought bad press on their company by their practices. They were accused of using false statements as well as misleading statements regarding their systems that were put into effect to protect themselves from the problems in the housing market. The many criticisms of Freddie Mac could not have happened at a worse time. While housing prices were dropping and defaulters were increasing, they could have argued that they were not completely responsible for what happened.

Freddie Mac was then placed into conservatorship. Unlike nationalization, this is only a temporary measure. However, it does limit the decisions they can make without prior permission. This happened in 2008, as there were a number of problems within the company and questions were being raised about the way that it was being run. There were severe losses that brought criticism of its accounting practices. Bailing them out cost the government $150 billion. Freddie Mac’s reputation was surely damaged by this event. There had always been the assumption that Freddie Mac was too big to be allowed to fail, so the government would have had no option but to find the money to help them. This had been the biggest bail out in American financial history. The company was given only a couple of years to sort the problems out as the government will pull back its support in 2012.

While there were many issues for Freddie Mac, homeowners were not put at risk in any way by these scandals. They seemed not be in danger of Freddie Mac foreclosures by these particular scandals.

Things are looking up for Freddie Mac however. They are now in a position to ask the government for much less financial help than they have in the past. It has still asked for $100 million in support, but this is lower than in the past.

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ted States biggest mortgage companies. Freddie Mac is actually means Federal Home Loan Mortgage Corporation and along with Fannie Mae it holds 5 trillion dollars of debt.When Fannie Mae was transferred from the Government to private investors in 1968, there were concerns about it being run as a monopoly. To solve this problem Freddie Mac was established in 1970.

The main reason for Freddie Mac foreclosures being set up was to create a conventional home mortgage, stop the problem that they had at the time whereby different areas had different interest rates, and also address the lack of availability of different types of mortgages.Freddie Mac had to raise a great deal of money before they could go into business and to do this, they sold $100 million worth of stock. This was bought by 12 Federal Home Loan Banks.In 1971, Freddie Mac was ready to trade in earnest, and this was at a time when mortgage rates were starting to fall. This year, the said corporation sold its first mortgage-related security.

Freddie Mac is well-regulated, and the Government often intervenes in how they operate. An example of this was in 1977 when Jimmy Carter brought about the Community Reinvestment Act. This meant that Freddie Mac now had to make sure to allow loans to be made to people who would have been classed too poor to qualify in the past.Since 1989, Freddie Mac has been regulated by the Department of Housing and Urban DevelopmentIn 1999, Bill Clinton, gave the corporation strict numerical quotas for forcing sub-prime loans further allowing poorer people to get loan, but also increasing the risk of default.In 2001, it was found that the size of the two companies was a problem.In 2004, the company was hit by an accounting scandal whereby there was found to be $4.5 billion of accounting errors, leading to the removal of three executives. They were forced to raise their level of core capital by 30%, limiting their ability to buy mortgages.As more people were defaulting, they had their capital requirements reduced as they were allowed to add $200 billion into the market, and the number of Freddie Mac foreclosures was rising.By July 2008, it was realized that it was the worst year since Freddie Mac’s inception, and they are expecting to have to be bailed out by the Government.

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Of late the foreclosure related housing crisis has caused innumerable evictions resulting in thousands – if not millions, being rendered homeless. During the time of the housing boom the mantra had been to own a house. This has always been the great American dream and the very basis of its psyche. The sub-prime mortgage debut was accelerated with the pushing on of this dream into an absurd reality. Those without any income credentials were sanctioned loans to buy houses. The idea was to get the money flowing from the mortgage institutions to artificially balloon up the housing industry. The shrewd thinking was that either way the lenders benefited. If borrowers remained current on mortgage loans then money would be coming in at a high rate because the value of the houses had been falsely appreciated. If borrowers defaulted then the lenders would seize the property and sell at a higher rate. The logic was based on a naive belief that real estate prices could never come down. But this is exactly what happened.

With so many turning homeless overnight because of foreclosures suddenly the demand for rentals shot up. The greater the demands for rental the more did it indicate that foreclosures were on the rise.

Meanwhile the government at state, local and federal levels as well as the communities pitched in to contain foreclosures. There were massive relief measures. It is an ongoing process with the latest being the mother of all bailouts – the $700 billion package. It is difficult to gauge how far effective the previous efforts that have been in circulation since the last one-year is being successful. Rental vacancies can be taken as a tentative yardstick. If the rental vacancies are increasing then it indicates that the foreclosure weather clouds are perhaps clearing. It shows two things – less number of people is suffering foreclosure evictions and or sale of houses are picking up causing affordable housing to be available for the ordinary American.

Writing rental cheques does not have any benefits like tax deductions or increase in equity of the house. That is why Americans have always wanted to own houses. Rents have been the highest in New York City and San Francisco. It has risen by 6.6% since last year. In the Bay area the increase has been by 7.8%. This shows that the landlords dictate the market. In Columbus, Ohio the rents are slightly lower.

According to a survey conducted by Marcus & Millchap of Encino, California rental data was collected from 40 largest cities of America for 2007. Estimated figures for 2008 were taken including vacancy rates, new building project and job potentials. Of these three, it is the vacancy numbers that affect price rise. In the sales zone an inventory of 5% unsold units means a glut. In the rental world 5% vacancy rate point to a healthy market.

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By virtue of the foreclosure laws in the State, Phoenix, AZ has multiple option for foreclosure open to the lenders of Phoenix, AZ. The judicial and non-judicial foreclosures of Phoenix, AZ properties whose owners have defaulted in repayment of the loan are available and for quick and easy completion of the process, most of the mortgage lenders in Phoenix, AZ prefer the non-judicial foreclosure. Thus Phoenix, AZ foreclosures can be completed out-of court from the date of the first notice of default being sent to the home owners. In case of Phoenix, AZ properties pledged under mortgage deed, the lenders in Phoenix, AZ file law suit and the recorded notice at County court of Phoenix, AZ is sent to the borrowers as “Lis Pendens” – pending law suit. If a power-of-sale is included in the deed of trust between the Phoenix, AZ lender and the borrower, then the trustee records a notice of sale by foreclosure and conducts the sale by public auction in the Phoenix, AZ court steps or the office of the trustee. Phoenix, AZ properties pending foreclosure sale are to be publicized in the local news papers at least three times. The borrowers of defaulted Phoenix, AZ properties have the chance of redemption within 3 months after the judicial foreclosure sale in the Court, whereas in the out-of Court trustee sales, no such redemption is possible.

The flexible legal procedures of Phoenix, AZ provide for opportunities to prospective home buyers in three ways. Phoenix, AZ properties which are under pre-foreclosure stage can be negotiated for, directly with the home owners. But this option of buying Phoenix, AZ properties is very limited since there are no good numbers of properties falling in this category (only 30 Nos. as on date). There are Phoenix, AZ properties fixed for public auction by trustee sales – the highest as on date 4440 properties – where they can be bid for and acquired. Phoenix, AZ properties which are already foreclosed and lying as Repossessed properties by Banks numbering 2621 offer an excellent opportunity for acquisition with clear-titles and in good condition with a bargain of up to 20% savings, which itself can run into thousands of dollars in real terms.

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The mortgage crisis, which came into focus last spring, threw a cloud over the economy. Foreclosures rode rough shod over the country. Its pace has not been brought under control yet. The bill was the government’s reaction to the imperative crisis that just could not be ignored considering the huge number of foreclosures. It is not just the borrowers – many lenders have downed shutters and investors are badly hit with jumbo losses.

It is calculated that about 2.5 million adjustable-rate mortgages valued to be worth approximately $600 billion is ready to jump to a higher niche This will make it impossible for many to keep the mortgage running. Inevitably they will be served foreclosure notices. That does not bode well for society at large and the economy in general.

The loan culture has landed the country in this situation. It is being exported across the globe too. Some had reasoned that loans would allow money to enter the market, push up sales and make everybody happy. Today it has made everybody unhappy – and not just the borrowers. Those evicted from foreclosed houses do not vanish into thin air – they crowd around rental accommodation or put up at state run homes. That puts a pressure on state funds. The disgruntled section – a huge chunk – is not good for the health of any society. Too many houses tagged by foreclosures have resulted in a glut in the real estate market. Buyers are hard to get. Often the value of the house is less than the lien on it. The abandoned houses attract criminals as well as snakes, frogs, algae and mosquitoes. Disease has already started to take toll.

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Greg Smith is the assessor and conducts valuation with the help of his staff. He is on the alert when family members sell to each other. The market value determines the assessment and not the good will of selling easy to a favourite brother. In terms of hard cash a buyer who has paid $350,000 for a bank owned condo would have to pay taxes for the unit being valued at $450,000. So at the end of the story it does not turn out to be much of a bargain!

The assessors are a strict lot – determined to scrutinize the market and not emotions. But of late there is hardly any work. With foreclosures on the march there are more and more foreclosures and fewer buyers. So who will assess what? The workload of assessment offices has gone down by 10%.
On the other hand innumerable house owners have applied for reduction of property taxes because real estate value is falling. The result is that municipalities and state government collections boxes are sounding empty. There are no sales and values are falling in a superheated real estate market. The owners of houses are pressing the tax agencies to lower house taxes to allow them elbowroom. A house purchased for $700,000 a year ago is now worth $60,000. This means that in a year $1,000 should be saved in taxes. In many cases the loaned amount is more than the worth of the house. This is causing many investors to just walk away from the proverbial bad loan.

About 13,500 house owners in the county appealed between July and November for a review of property tax. Last year there had been 3,300 requests filed during the entire twelve months ranging from July 2006 to July 2007. These fresh appeals are exclusive of 11,500 units whose taxes have already been lowered. The question that pops up is that banks repossessed houses are going for a song but does it or does it not determine the parameter of valuation?

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