Fannie, Freddie & Ginnie .... Household Names ... but, What Are They??

Fannie Mae, Washington DC

You've heard these terms before....  but what are they exactly?   

Fannie Mae                All About Fannie

President Franklin Roosevelt's New Deal established the Federal National Mortgage Association (Fannie Mae) in 1938 as a federal agency in the wake of the Great Depression.

Its purpose was to bring liquidity, stability and affordability to the U.S. housing and mortgage markets.

Congress converted Fannie in 1968 to a publicly held corporation to help balance the federal budget.

Freddie Mac                   Freddie FAQ    

To compete against Fannie Mae's domination of the secondary market and further lower housing costs, Congress chartered the Federal Home Loan Mortgage Corporation (Freddie Mac) as a public corporation in 1970.


What do they do?       Fannie & Freddie at Work in the Secondary Market


Freddie and Fannie have similar Congressional mandates, charters and regulatory structures.

 Both entities buy mortgages from lenders and package them into mortgage-backed securities that are sold to investors with a guarantee against default. This creates a secondary market, allowing mortgage lenders to use the freed-up funds to make more home loans.

Ginnie Mae                 All About Ginnie

The Government National Mortgage Association (Ginnie Mae) was established by Congress in 1968. Unlike its GSE siblings, Ginnie does not purchase loans, but guarantees investors the timely payment of principal and interest on mortgage-backed securities containing federally insured loans — mainly FHA and VA loans.

Recently

In September 2008, the U.S. government rescued Fannie Mae and Freddie Mac from the brink of economic failure and placed them into conservator ship with the Federal Housing Finance Agency (FHFA). Some members of Congress have called for the gradual elimination of Fannie and Freddie to leave mortgage finance completely in the private sector. A Treasury Department report on the future of Fannie and Freddie will be delivered to Congress in the first half of February 2011.

info provided by:   Lynn Ashe, Prospect Mortgage
Looking for a home, thinking of Selling, Renting or Investing?       Give me a shout    508-494-9061 or cal@alandcal.com

                                        Your Home Search Starts Right Here!



cap

The $8000 Tax Credit Still Exists for Some!!

with restrictions of course!

for more info contact the IRS at 1-800-829-1040 
www.IRS.gov

 If you know of someone in the Military ... Foreign Service or Intelligence
this info could be important to them......

            

Who qualifies?

public-image-domain.com
soldier on a military boat
by Nat Edwards

•  Member of “uniformed” services  
•  Member of US Foreign Service 
•  Employee of Intelligence Community  
•  Spouse of any of the above

 And must have had:

•  Extended Duty outside the US for 91 days, or  
•  Extended Duty inside the US for 91 days and had to relocate at least 50 miles from principal residence  
•  Sold principal residence between Jan 1 2009 & April 30, 2010

 Tax Credit Dates Extended to:

•  Signed contract by April 30, 2011  
•  Closed by June 30, 2011

Can get tax credit if:

•  They sold their home or the home stops being their principal residence as of January 1, 2009 (because of government orders)  
•  Extended duty (either inside or outside the US) and had to move at least 50 miles away from principal residence  
•  (Extended duty is defined as 91 days service (either inside or outside) the US.)  

Info provided by Michael Dunsky, Guaranteed Rate Mortgage Co.


If you know of anyone looking to buy, sell, rent, or invest in Real Estate... I am here to help...
cal@alandcal.com

Nicole's Law .... CO Detectors.... Are YOU Safe??

Another tragic news story tugs at our hearts and reminds us to be aware of this dangerous gas..

Do you know that you are required by the Commonwealth of MA to have CO detectors in your home?  

If your home is equipped with fossil-fuel burning devices you are!   This includes but is not limited to a furnace, boiler, water heater, fireplace or any other apparatus or appliance......or has an enclosed parking within the structure?

In March 2006, Nicole's Law was adopted here in the Commonwealth...

Nicole's Law

It calls for a home to have a CO detector on each finished level.. and there must be a detector placed within 10 feet of the bedrooms.    They don't necessarily need to be hard wired and an can be as simple as a plug in with battery back up.  

Nicole's Law was adopted after young Nicole Garofalo perished in January of 05 .. a result of Carbon Monoxide build up in her home ..... a heating vent was blocked by drifting snow.

What makes this so deadly?    
 
CO is a colorless, orderless gas...  it can sneak up on people without them even knowing it.
Symptoms include headache, weakness, dizziness, nausea, vomiting, confusion, chest pain and a cherry red coloring of the skin......

What to do if you suspect CO poisoning?  

Get out of the house and into fresh air....   that includes everyone including pets!....  then get to a medical facility for treatment. 

What types of Detectors are acceptable?

What ever alarm you purchase must be approved by an independent testing laboratory such as Underwriter’s Laboratory (UL). Be sure to look for the approval label when buying alarms. The CO detectors may be:


                               •Battery operated with battery monitoring; or
                               •Plug-ins with battery back-up; or
                               •Hard-wired with battery backup; or
                               •Low voltage system; or
                               •Wireless, or
                               •Qualified combination (smoke/carbon monoxide alarm)


When Selling your Home

You need to know that the local Fire Department will need to inspect & certificate your home for CO and smoke detectors...  No certificate, no closing...

If you are looking to make a move or have any Real Estate questions...  give me a shout! 

Buying a Short Sale for you? (Part 3)

In our Multiple Listing Service, you will
know it is a "Short Sale".  You will
see this disclosure.

The term "short sale" or "bank owned" on a property certainly generates a lot of buyer interest.   So buyers must believe that the short sale is a deal...  but is it?

If you have the Time and Patience, and the right players involved..   then, it may be.

We know that someone offering a "short sale" is attempting to avoid foreclosure.
We also know that the lender accepting a short sale is attempting to minimize their loss.
We also know that a good Realtor will price their listing ahead of the market, because they know that it is going to take time and a buyer may have to wait a long time for this property.  

So,   Is it for you?   Here are some things to consider...

• The Seller/Realtor priced the property aggressively but also knowing that the bank may not accept the price....the agreed upon offer price will have to be supported by BPO's (brokers price opinion) or appraisals.. in other words validated by others not involved in the transaction.
• There is a possibility that the bank will say no...  alot of time could be wasted waiting for the banks response....    no problem you say    ... but experience tells me that come month two with no word, a buyer will start to worry about interest rates and missed opportunities...
• If there is a second lender on this property (very likely)..this second lien holder has less motivation to agree to remove their lien...
• This process really can't begin until the seller accepts an offer on the property....   it can and will take months....    again, just because the seller accepts the offer doesn't mean bank(s) will.  
• Who is negotiating the "short sale"...  is it someone experienced?    Is the Sellers paperwork in order... Do they have a bonafide hardship? 

If you can deal with the unknown and the possibility of not having it happen.. then you may make out okay and get a "deal".     You will also need to understand the Banks position here.   Their attachment to the home is strictly financial...They will do their due dilligence and research  market value....   
Are they really going to sell this out substantially lower than the market will bear at this point in time?   
If you need to find something more immediate or are worried about interest rate changes effecting your payment, then you might want to skip looking at these types of listings.  

In my market, the "short sale" is disclosed in the listing.

If you do decide to go the "short sale" route...   get your inspections done and financing in order early in the process....

You don't want to go all this time waiting to find out that it is not the home for you after all....

Selling Short... Your best option??? Part 2

A guy on fox 25 News the other morning was talking about short sales...    he said was that people overpaid for their homes and in some cases find themselves short....    really?????

Most likely they didn't overpay for the home...  It was market value at the time!    Saying they overpaid makes it sound as if it they saw they did something wrong..... They didn't!    It was the market!!!!...
When the market turns around, .. and it will... will those folks who have purchased today be said to have underpaid????      I don't think so....  

Okay, off my box....  and on to the topic...

So, you "overpaid" for your home and find your self in a financial situation where you can't keep up with the mortgage payments...  what do you do?

you  have a few choices to avoid foreclosure....    as stated in an earlier blog .... BUT,  the one choice you don't have is to hesitate....

If your interest rate is the culprit and you could afford the payments if they were only a bit lower.. you might think about re-negotiating rate and terms with the lender....  a "loan modification"....  the caviat here...if the interest rate is lowered or the term extended and you still can't afford it  ..... it's not your option....

or, you could work out a deed in lieu of foreclosure

or,  a "short sale" may be your option.....

A lot of talk going on now is that the lenders are being tough and not considering "short sales". ..   more likely, they are really scrutinizing whether or not a "short sale" is warranted.

• do you have a hardship?
• do you have a ready, able and willing buyer for your property?   
•  is the offer reasonable?
•  is the offer arms length?

If you chose the short sale option, get your home on the market with a Realtor experienced in short sale negotiations.  Price it correctly!     ... Accept the best offer.....  Make sure the buyer is preapproved and can wait.... these things can take some time.... (you don't want to get this thing approved only to find out the buyer can't move forward )  Get your financial paperwork and that hardship letter in order....  your Realtor will provide you with a list of things to have ready....have them ready and be ready to update as necessary....

Ultimately, the option you chose will depend on your personal situation.   

Nobody wants to find themselves facing  foreclosure.... but if you see it coming, you can hit it head on..
and if you do..... you will come out the winner....  emotionally and financially....


Coming Soon...

Part 3       Buying a Short Sale - Is it for You?


contact me if you have any questions...   Carol-Ann
cal@alandcal.com 508-494-9061

Have You Seen This?....and Wondered? Subject to Short Sale Approval ( Part 1)

The subject of  "Short Sales" is always coming up.   We are asked what it means, how and why it's done.

The nutshell answer...

when the sale proceeds are less than the money owed to the lender of the property, and the lender releases the owner of his obligation to pay the entire debt so that the owner can sell the property, we call it a "Short Sale".

For example....

the owner of a property owes a lender (or two) a total of $300,000.    Current market value on the property is $250,000.    if they don't have $50,000 plus closing costs, they can not sell and satisfy the liens on the property.    

So, in order to avoid foreclosure, the owner may put the property up for sale for less than he owes, procure an offer and submit it to the lender(s) with a request that he be released of his obligation to pay the entire debt.

The lender may agree to this to avoid the foreclosure as well.   Why?   Foreclosure is costly to them and they will likely only get market value anyway.   

With a short sale, the seller must have the lender's approval to convey the property.    If the lender does go along with the process, it saves the seller not only the cost, but the embarrassment and emotional drain of a foreclosure... there maybe less credit damage as well.

If you have questions, contact me...we have plenty of experience and success on both the selling and buying side of short sales.

next - 

Part 2     Selling your Home - Is Short Sale YOUR Best Option?
Part 3     Buying a Short Sale - Is it for You?

Painting.... Does it add value??

What you normally find on the cost vs value charts is things like kitchen/ bath renovations or deck replacements...but

2010-2011 Cost vs. Value Chart


The question is does freshening up your home with paint add value?   

with Christmas coming and my addiction to HGTV...
I gently (really Cal??)  urged Al to do a dining room makeover....
I thought, No Big deal really......
We are Realtors for crying out loud!    We know that bright homes are a Giant attraction for people!

... a little paint... new light... curtains...just brighten the place up a little.  

Well....it's done and that's all I'll say..other than, he did a great job....but,

Did we add value?

Probably not monetary value..
but what we really did, was improve the "sale-ability" of the home... and our life style at the same time....

and sale-ability is really important these days with so many homes on the market.....  it's the attraction that makes a buyer chose one home over another.... the more polished looking home with the perception of little to do, wins out every time....

so while we are all looking to gain value....
it's not just the monetary Value that  we need to consider....
sale-ability and lifestyle should be huge considerations on your list.   A fresh coat of paint is an easy, cost effective way to achieve this!
       
        and, oh by the way... 
        now the rest of the place looks shabby......

       should I wait till after Christmas to approach this??????