Ocala Real Estate Blog

No wonder modifications are taking so long, between the banks and the investors and the consumers, Freddie Mac and Fannie Mae are looking to hand back the loans that are"Bad loans." 

From the August 18th WSJ Real Estate Journal here is some of the story:

"While mortgage delinquencies are easing, banks are facing a new round of losses from loans made just before the financial crisis, and the fight to keep them off their balance sheets is intensifying.

Leading the charge to make originators repurchase their loans are Fannie Mae and Freddie Mac, the two government-owned finance agencies that guaranteed the mortgages. The firms are sorting through delinquent loans for signs of any violations of the representations and warranties, known as "reps and warranties." In essence, they are looking for lies made by borrowers or lenders in loan applications. "

They state it is going to take 2+ years to clear this up and it is not going to be pretty during the process.  I hope you are not in the center.  If you are you may need some real professional help. 

The idea of writing up anyone that wants a home, is a practice that can only be carried out in the new home marketing industry.  With the number of homes reported sold is being higher than closed, it only helps create an enthusiasm that is in reality short lived.  That is not something that can be pulled off in the general real estate market, or is it?  When we look at the number of homes that come back on the market from Fannie Mae and Freddie Mac, it has to be some of the reason.  Many of the sell-failures are for other reasons, but, there are a lot of wishful contracts written, mostly in the new home industry.   It only kicks the can down the road.  New home builders are having some success, but small, we must live with the reality some day. Someday is here now. It effects all of us.  Low appraisals, tough credit rules and hard to sell existing homes are contributing to the problem. We must concentrate on the latter first.  Let's get general real estate moving again. 

Next we will look at some home builder reality numbers.