San Diego short sale


Thursday, January 15, 2009

Fed is now buying Home Loans - this should help a few sellers

Fed begins purchasing mortgage securities - San Jose Mercury News
NEW YORK — The Federal Reserve Bank of New York said today it has begun purchasing mortgage-backed securities in an effort to bolster the battered housing market.

The program, initially announced Nov. 25, allows the Fed to spend $500 billion to buy mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks. The program is aimed at driving down the price of mortgages and making home loans more available.

The New York Fed is overseeing the program for the Federal Reserve. The New York Fed is working with four investment managers — BlackRock Inc., Goldman Sachs Asset Management, PIMCO and Wellington Management Co. — to purchase the securities.

Up to $500 billion in securities will be purchased by the end of the second quarter.

The mortgage-backed securities being purchased are considered investment grade and are not the packages of loans that helped ignite the current credit market turmoil. An initial sharp rise in defaults in 2007 among subprime mortgages — loans given to customers with poor credit history — helped touch off the ongoing credit market downturn. As defaults continued to rise, the value of securities backed by subprime mortgages plummeted and investors shied away from purchasing the risky debt.

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Foreclosure Sale Suspension

This suspension give time to sellers to get short sale offers into the lenders. 

Media: News Releases > Fannie Mae Extends Foreclosure Sale and Eviction Suspension
Fannie Mae Extends Foreclosure Sale and Eviction Suspension

WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced that it would extend the suspension of foreclosure sales and evictions from single-family properties through January 31, 2009.

This action will enable the company to work with mortgage servicers to further implement the Streamlined Modification Program (SMP) announced on November 11, 2008 and initiated on December 15, 2008. The extension will also provide additional time for the company to operationalize its new National REO Rental Policy, which will allow renters in company-owned foreclosed properties to stay in their homes. Details of the new policy are expected to be announced shortly.

The temporary suspension of foreclosures will allow affected borrowers facing foreclosure to retain their homes while Fannie Mae works with mortgage servicers to implement the SMP. Foreclosure attorneys and loan servicers have been instructed to use the additional time to reach out to borrowers and continue to pursue workout options. The initiative applies to loans owned or securitized by Fannie Mae.