Friday, February 27, 2009

Food For Thought - Private Investor Foreclosures

Here’s some food for thought… President Obama’s Homeowner Affordability and Stability Plan, the details of which will be available next week, focuses heavily on Fannie Mae and Freddie Mac backed mortgages.

However, according to a presentation given by James Lockhart , the Director of the Federal Housing Finance Agency (FHFA), to the Association of Government Accountants on the 19th of February, third quarter 2008 national default information shows that while private label (private investor) backed mortgages are only 16% of all outstanding mortgages, they account for 62% of all seriously delinquent mortgages.

The FHFA report defines seriously delinquent as a payment that is at least 90-days past due.

In addition, Freddie and Fannie account for 56% of all outstanding mortgages, but only 19% of seriously delinquent mortgages.

PLUS, mortgages held in a bank’s portfolio account for 16% of all outstanding mortgages, and only 6% of seriously delinquent mortgages.

Can we infer anything from this information? Prior to 2008, and now again in 2009, Fannie and Freddie required that their home buyers complete a certified Home Buyer Education Workshop - - known as Home Stretch in Minnesota.

Many of the bank portfolio loans – especially first-time buyer programs and low- to moderate-buyer programs, ALSO required home buyer education - - especially in Minnesota. Is this a fair inference? Feel free to discuss in the comments.

The Minnesota Home Ownership Center believes that Home Stretch, homebuyer education and counseling is key to making informed decisions about the important choices related to homeownership. Is homeownership right for YOU? Home Stretch can help answer that question.

Are you having difficulty making a payment? Whether your mortgage is owned by Fannie Mae or Freddie Mac - - or any other lender or servicer, the Minnesota Home Ownership Center’s network of Foreclosure Counselors can help. Click here for more information.

1 comment:

  1. In addition to educated buyers, as you mentioned in the post, one other reason for the huge difference may be the fact that Fannie/Freddie and the private portfolio mortgages are primarily owner-occupied residences. A HUGE number of foreclosures are occuring on investment (non-owner occupied) houses. Loans to speculators/investors would primarily fall in the "Private Label" category.


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