Freddie Mac has over 1.5 million homes for sale at any one time. These are obtained as a result of the previous buyers defaulting in the loans.

In April last year, they were planning to sell of 300 homes in Southern California and Las Vegas. The quick sale would allow buyers to receive an $8000 tax credit for first time buyers.
Freddie Mac still wants to prevent foreclosure and in a time when the housing market is far from stable, they have been able to keep over 132,000 American families who are struggling financially to either be able to stay in their homes, or sell them on rather than lose them. When the foreclosures are sold, they are sold at very low prices, so anything that can be done to stop that is to be welcomed.

Once a home has been lost, however, Freddie Macs need to sell it to the next buyer as soon as possible. In 2009, they gave a deal that would have made it much easier to buy a house. As well as agreeing to cover the closing costs, they also gave a free two year home warranty to cover all major appliances and also the possibility of buying new ones with a 30% discount.

3.5% of the cost of the house will be covered as a result of Freddie Mc paying the closing costs.In 2010, it does appear that things are beginning to improve, as the amount of bad loans began to decrease. While this is good for many people, builders are being affected as people are choosing to buy a foreclosed home rather than have major renovations on their own or even go for a new build.The number of available properties might decrease if people realized the cost involved in a bank foreclosing on a loan. While some lenders will put the figure at between 20 and 25% of the loan, Freddie Macs put a figure of $60,000 on it. They also consider that 68% of low income owners could be spared the problem if they admitted that they had a problem at an early stage. For owners who did this in 2009, Freddie Mac foreclosures arranged loan modifications, Home Affordable Modification Program and this helped some 42% of the 16,000 properties. Figures improved in the last part of the year, but they were still at 29%.Only time will tell if the HAMP program works.

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When buying a home, the buyer should carefully choose their agents and get only the best deals from a trusted institution. To ensure that you’re entering a safe transaction, Fannie Mae is one of the institutions that help consumers deal with the banks and fund your loans by issuing debt securities. It has helped the American people reach out to affordable housing since 1938 and is also helping the United States to maintain economic stability in the housing sector.

Talking about affordable housing, not all especially low-income families could afford new homes on their own. For those who want to save a few thousand bucks for a property, buyers can take advantage of Fannie Mae foreclosures which showcases properties that are repossessed by banks. The main advantage is not just affordability but also a wide selection of homes owned by different banks in just one database. Also, Fannie Mae ensures that buyers would have a competitive loan terms suitable for buyers’ income bracket.

Fannie Mae doesn’t deal directly with consumers. It has a branch that deals with real estate agents to make home ownership for a buyer a reality. These agents are Fannie Mae’s clients. How do the clients evaluate the work of this institution? Fannie Mae is working closely with the government so even if it’s a privately funded corporation, the terms, agreements and policies are aligned with what the government implements. Agents find Fannie Mae very organized in a way where its properties are sold in its pricelist. Fannie Mae’s process requires a lot of patience because buyers’ offers would always have counter offers from other buyers until the final sale. Others said it’s worth the wait because the buyer can save money as long as the price is competitive for Fannie Mae.

Fannie Mae’s process may be cumbersome but take note that it also has to secure its interest over the debt securities it is going to issue on your behalf. If a buyer really wants to have a home to call their own, waiting for a little longer and strategizing could go a long way to achieve savings. Fannie Mae has a great support system especially for consumers because it teaches responsible home ownership, avoiding foreclosures and managing the loans properly. They also have hotlines that you can reach for advising. Believe it or not, the last thing in their minds is to foreclose homes because it is a costly process for them too.

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Fannie Mae sounds like a girl’s name but it is only a colloquial term for Federal National Mortgage Association (FNMA). Before buying homes with their aid, it would be best to know a little history of the institution to provide a background before trusting them.

Fannie Mae started in 1938. During the Great Depression, President Franklin Delano Roosevelt implemented economic policies to increase the number of Americans who own homes and at the same time allowing lenders to lend money by using the government’s money. The creation of Fannie Mae also makes owning a home much more affordable for people and at the same time giving confidence to lenders to invest in home loans in the wake of recession. It was part of the President’s New Deal to make mortgage markets to be more liquid and stable, which is essential in the recovery during Great Depression.

In 1968, Fannie Mae has been chartered by Congress as a Government-Sponsored Enterprise (GSE) which means that its securities are open to public for sale. This allowed the government to have more funds to use for lending and to take out some federal money capital to fund the Vietnam War. Later on, Freddie Mac or Federal Home Loan Mortgage Corporation has been established to compete with Fannie Mae. Like Fannie Mae, Freddie Mac is also a government-sponsored enterprise.

For years, Fannie Mae had implemented a lot of changes when it comes to improving home ownership of the Americans, which includes reaching out and giving low income borrowers a chance to own houses, as well as enforcement of standards in mortgages and taking risks. Like any other business, Fannie Mae had its fair share of bad decisions on the risks it took that made it lost hundred millions of dollars. But being controlled by the government, it received aid through the Federal Reserve to make sure that its borrowers and lenders are not affected. The borrowers also benefit from amendments of the laws on housing, and Fannie Mae being a GSE, it has some control over the implementations on how it does business to its clients. Fannie Mae foreclosures could not be avoided but the institution does everything it could so that the borrower would be able to pay for the mortgage. Usually, Fannie Mae reassesses the loan terms and coordinates with the banks to stretch a little. It may be a little spoiled but it is a great opportunity for people who are very willing to own a home with the aid of taxes.

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Carrots and requests are not having any effect on banks to prevent foreclosures – they are going along their own way not making loans permanently modified, despite inking contracts. The borrowers are observing their side of the deal but the banks, without fear of any reprisals are continuing with their foreclosure game and seizing property after property ravaging the socio-economic structure of America.

Two Representatives Grijalva and Kpatur sent a communication to the Treasury Secretary Timothy Geithener with signatures from 25 other Democrats of the House proposing the setting up of “a new federal entity” fashioned along the lines of Home Owner’s Loan Corporation or HOLC. The capital would come from the remainder of the TARP funds. In the communication it was stated that at the time of the Great Depression the government acquired successfully over million mortgages, refinanced and then serviced them prior to selling them. This operation of the government accounted for one out of every five non-farming dwellings in America. The letter read, “Such actions prevented untold foreclosures and even managed to return a small profit to the Treasury.”

In some places like Philadelphia compulsory mediation efforts have produced results and foreclosures have been kept on hold. Senator Jack Reed (Rhode Island/Democrat) has initiated a legislation that plans to generate a grant programme of $80 million to prop up these similar kinds of attempts.

A spokesperson of the Treasury said that the Federal Government is extremely worried about the moral implications of rewarding those who have taken loans which they should never have done. But the most alarming moral danger is to pamper the interests of the banking lobby.

It is irrelevant whether the house is being lost because of toxic sub-prime loans, unemployment or because the house has gone underwater with the worth of the property being less than the loan due amount. Each and every foreclosure brings down the value of neighbouring houses and negatively impacts on the revenue collection of the state. Loss of revenue leads to loss of jobs as well as services offered by the state. A terrible cycle sets in that is difficult to break.

HAMP is supposed to be of assistance to nearly 3 million or 4 million foreclosure victims but so far it has contracted only 230,000 permanent loan modifications. Last March there were 367,056 foreclosure postings – creating a record. It is a spike of 19% from the previous month of February.

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The banks are most unhappy with a new plan by the new Obama government to set up new regulatory controls over financial bodies. There is a proposal to set up an agency whose only mission would be to see to the interests of consumers. But banks are ready to take on the challenge to prevent such a move with all the weapons they have at their disposal. The Democrats in the Senate and the House backed by consumer groups are equally determined to see the plan through.

The proposal would take away all the responsibilities that the present bank regulators like Federal Reserve, Insurance Corporation, Comptroller of Currency and Federal Reserve have towards the consumers. The new agency would be given a free hand to introduce standards for the conventional mortgages. It would also have the power to make it mandatory for lenders to offer such types of loans that will give borrowers a chance to opt out of the more dangerous and riskier ones.

Moreover the agency would be able to ban those mortgages that include hidden charges and sharp fines for the borrowers who attempt to clear the loan at a date earlier than usual. The agency would also have the authority to interpret and put into force the revised credit card law that had been passed by the Congress in the previous month. The aim is to prevent banks from continuing with their previous habit of raising interest rates arbitrarily.

There would also be examiners, akin to the current agencies dealing with bank regulations, which would have right to enter certain specific institutions, issue subpoenas, comb through their activities, seek changes and enforce fines.

Government officials opined that the plan would create a fair playing field and allow for the same type of regulation on financial products as was applied on consumer products. In sharp contrast the current regulators have authority over only certain kinds of financial bodies. The Comptroller of Currency oversees and regulates the national banks while the Feds supervise the holding firms.

Michael Barr, the Assistant Secretary for financial institutions said, “The agency will be able to get to the root of the mortgage crisis that we saw in the past. It will be able to go in to examine, supervise the operations of previously unregulated parts of the sector.”

John Taylor of National Community Reinvestment Coalition said, “It’s obvious from the history of the last 20 years that the regulators never understood that protecting consumers is also a way of ensuring the safety and soundness of financial institutions.”

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It is not so much sub-prime mortgages but recession that is at the root cause of rising foreclosures. In 2008 it was the toxic loans that had triggered the foreclosure wave but in the current year it is the bad days that are responsible for throwing out people from their houses.

Compared to the previous year there has been a sharp increase in foreclosure posting in Lackawanna County and Luzerne County. The increase has been by 4.2% and 2.4% respectively. The figures indicate that recession with its attendant evils of unemployment and falling wages are responsible for the crisis in northeastern Pennsylvania.

The increase in foreclosures today is attributable to the general economic gloom said Professor Satyajit Ghosh of University of Scranton. His subject of study is economics and finance. The local lenders had not indulged in toxic and risky loans but nevertheless this has not helped to keep it immune from the national disaster. Dr. Ghosh opined, “People are stretched to the limit. Maybe they have a conventional loan from a lender acting in good faith, but now they find themselves in a bad situation, where they may have lost their job, or the household lost an income, or they took another job at less pay.”

According to First American CoreLogic foreclosure postings dropped from April 2008 to May 2009 in Scranton-Wilkes-Barre-Hazelton metro region that comprises of the counties of Luzerne, Lackawanna and also Wyoming. But despite this the speed of foreclosure activity has been steadily increasing during the recent months.

CoreLogic noted that in April all the defaulting mortgage loans calculating to nearly 1.7% were in trouble. This was a modest improvement on the national figure of 1.8%. In April 2008 nearly 1.5% of all mortgage loan holders across the country were being threatened by some form of foreclosure.

Defaults have been increasing in the region. CoreLogic noted that nearly 4.4% of all the home loans in the region were lagging behind by at least 90 days. This as an increase of 3.6% in comparison to the previous year. Delinquencies are the first signs of impending foreclosures. Once borrowers start to lag behind it is difficult to catch up or manage a way out of the mess.

Dr. Ghosh commented, “We have been at a lower foreclosure level for some time because our banks and our homeowners didn’t go for exotic loans. These new foreclosures aren’t because of some irresponsible loans. It’s the recession.”

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Foreclosure news is taking precedence over all other issues – including those coming in from Afghanistan, Iran and South Korea. The international emergency that foreclosures have created poses a greater threat to the stability of the world than blood baths elsewhere in the world. This is the view of Joel p. Trachtman of Fletcher School of Law and Diplomacy, Tufts University. However he feels that the long winter is coming to an end and there are signs of the freeze thawing.

The crisis started in USA but soon became international because the entire financial system had become global by that time. The financial entities that were involved in the sub-prime mortgage fiasco included multinationals within and outside America. Other countries emulated the American system hoping to reap similar benefits. The whole exercise starting from the humble foreclosure of homes of ordinary folks and soon became a contagion that spread like an epidemic. American institutions were threatened. This meant their counterparts across the globe were also threatened. The wildfire of failure also spread through trade routes as exports to USA dropped. There were no takers of consumer goods in foreclosed America.

The root cause of the foreclosure crisis can be traced to the staggering increase in liquidity. This happened largely due to macroeconomics that was not matched by proportionate macro regulation. The excess of liquidity could be traced to low interest rates, China opening up with its exchange rates, rise in wealth from oil and other types of sovereign wealth funds. This led to the blowing up of the asset bubble. Cheap money was floating in the air. The question was – where to park it so that more than average returns could be reaped. Those who promised this came to be regarded as financial wizards and honoured with fees.

This surplus money flowed into the housing sector. There was a great demand, as usual for housing and this demand was fed by money flowing in. Those who engaged in house investments came to be regarded as financial wizards. The mortgage lenders were sure that since the security involved was something solid as real estate there was no fear of losing. Property value could never fall even if there were lending mistakes. This was a traditional belief. Legendary Warren Buffet had aptly summed up the situation and said, “It’s only when the tide goes out that you learn who’s been swimming naked.” The packaging and slicing of loans led to the swelling of the problem.

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Ohio is fed up with continued pace of foreclosures – a House panel has placed a six month moratorium on foreclosures. To deter the process the bill has also increased the fees for filing. The ultimate target is to see that the lenders and borrowers amicably work out the problem.

The residents of Ohio will get a six month respite from foreclosures but the provision that would have allowed the judges to alter terms of the mortgage was cancelled. But supporters of the bill are happy that at least something has been won – it being better than nothing. The House Bill 3 will impose a new fee of $750 for filing foreclosures. The money would go towards funding counseling for foreclosure prevention.

Bill Faith of Coalition on Homelessness and Housing of Ohio pointed out that according to the bill, new licensing and regulations have been introduced for those who service home mortgages and collect payments as representatives of the banks and other types of investors who are holding the mortgages. Loan modification standards would be worked out by the Ohio Department of Commerce stating guidelines for loan modifications. Faith added, “Now, servicers are incentivized to foreclose if a person stops paying. There is no incentive to work it out.”

Ohio ranked 11th in the number of foreclosure notices posted during the first quarter of 2009. In the state there were 31,595 foreclosure listings – 1.1% higher than during the same period of 2008 as per the findings of RealtyTrac. The foreclosures peaked in Ohio during October 2007.

In Franklin County the foreclosure numbers spiked to 9,300 in 2008 from 6,000 in 2004. Ed Leonard supported the bill and said it “will give lenders time and greater incentive to work out new payment terms with homeowners.”

This bill has been dubbed “the strongest, most progressive foreclosure prevention bill in the United Sates” by Rep. Mike Foley (Democrat).

Faith however feels that the clauses of the bill would make it limited in its effectiveness. Only those borrowers would benefit who could spare at least half the current mortgage amount. Also some credit unions and community banks whose assets are below $2.5 billion are exempted from the moratorium as well as the enhanced filing fee. Foley explained, “These guys are bending over backward to work with borrowers. Unlike the big guys, who could care less.”

Foley wanted judges to be empowered to alter mortgage terms when the loan had gone underwater but in the face of opposition from powerful interested parties he had to go reverse gear.

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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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It feels that the government steps as announced by Paulson and the Fed does not go deep down into the root of the foreclosure-ridden problems. It is simply a bailout and nothing more. The lenders who are responsible for this terrible foreclosure fiasco are being pulled on to the lifeboat while the ship sinks. The bail out will not do anything to stop the foreclosure rot that has taken on epidemic proportions. Rather it will be instrumental in dragging down the economy further – after all the game is being played with taxpayer’s money.

An integrated and comprehensive plan should reach out towards the ordinary hardworking citizen. They are already feeling the brunt of the Wall Street misdemeanors. If this issue is not addressed then any plan will just be a carbon copy of another. Only this time more taxpayer’s money will be put at risk. The taxpayer is being forced to buy predatory and dangerous loans from lenders who behaved in the most reprehensible and irresponsible manner. Multi million dollars belonging to the people are being pushed in to prop up private financial bodies. Yet millions of families who have been pushed into the chasm of financial ruin will continue to cry and moan.

The steps should aim at stopping 6.5 million foreclosures scheduled to surface within the next few months and by checking the falling property values will something of substance be done. Only those measures that will directly prevent 46 million families from drowning will be considered worth the effort. Only then can the economy begin to push ahead. It is the people who are the economy. Bailing out financial bigwigs is not the same as helping the man in the street facing homelessness.

It is silly to believe that the government will be able to check the foreclosure menace by buying off troubled debts. Mortgages of dubitable value have been sold off as securities that are so highly complex that the mess cannot be untangled. The pieces of the jigsaw cannot be put back into place. It is beyond the capabilities of the government. These securities have been sold to countless investors dotted across the globe.

The regulators and lawmakers have to take up a positive role if they want to save the country.

Or search foreclosures by state…

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