The Ambiguity of Headlines
September 7, 2010
It has become a bit difficult to understand the workings of the government vis-a-vis Fannie Mae. You might recall that Fannie Mae is one of the "government sponsored enterprises" (gse) that owns a multiplicity of underwater or already foreclosed properties.
A headline on September 3 in the Inman News that I receive was entitled "Fannie cracks the foreclosure whip". The article states that Fannie Mae announced that it will begin to fine servicers if they can't provide a reasonable explanation for completing a foreclosure. The article purports to state that Fannie Mae presently has a REO (real estate owned) inventory of 129,310 homes. So it is now going to fine servicers if they fail to foreclose in a timely manner.
The other headline that caught my attention was in the Sunday edition of the LA Times newspaper. It state "Fannie Mae offers incentives for foreclosed homes". These incentives include minimal down payments, no requirements for an appraisal, no requirement for mortgage insurance coverage and a minimum credit score of 660. In an era where lenders have stringent underwriting requirements, this is a real deal. It is only available on Fannie Mae owned properties. That large number, 129,310, of Fannie Mae owned properties needs to be moved out of their inventory. Hence the incentives.
I am just curious as to why the desire to speed up the foreclosure process on the one hand and the huge inventory of unsold properties on the other. I do understand the incentives to entice buyers to buy these properties, but increasing the inventory seems somewhat counterproductive.
It has become a bit difficult to understand the workings of the government vis-a-vis Fannie Mae. You might recall that Fannie Mae is one of the "government sponsored enterprises" (gse) that owns a multiplicity of underwater or already foreclosed properties.
A headline on September 3 in the Inman News that I receive was entitled "Fannie cracks the foreclosure whip". The article states that Fannie Mae announced that it will begin to fine servicers if they can't provide a reasonable explanation for completing a foreclosure. The article purports to state that Fannie Mae presently has a REO (real estate owned) inventory of 129,310 homes. So it is now going to fine servicers if they fail to foreclose in a timely manner.
The other headline that caught my attention was in the Sunday edition of the LA Times newspaper. It state "Fannie Mae offers incentives for foreclosed homes". These incentives include minimal down payments, no requirements for an appraisal, no requirement for mortgage insurance coverage and a minimum credit score of 660. In an era where lenders have stringent underwriting requirements, this is a real deal. It is only available on Fannie Mae owned properties. That large number, 129,310, of Fannie Mae owned properties needs to be moved out of their inventory. Hence the incentives.
I am just curious as to why the desire to speed up the foreclosure process on the one hand and the huge inventory of unsold properties on the other. I do understand the incentives to entice buyers to buy these properties, but increasing the inventory seems somewhat counterproductive.
posted by shirley harry at 8:30 AM
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