Skip to comments.Fannie, Freddie May Soon Buy Home Loans in Forbearance to Help Mortgage Firms
Posted on 04/21/2020 10:11:22 AM PDT by Theoria
A top U.S. regulator is considering taking steps to ease strains on mortgage companies facing a cash crunch as millions of Americans struggling with fallout from the coronavirus suspend their monthly payments, according to people familiar with the matter.
The Federal Housing Finance Agency is weighing whether to allow Fannie Mae and Freddie Mac, the government-controlled mortgage-finance giants, to buy home loans that recently entered forbearance, meaning borrowers have stopped making payments, the people said.
That would help nonbank mortgage companies that lend to home buyers and then quickly sell the loans to Fannie and Freddie.
The strategy was upended recently when Fannie and Freddie announced they would no longer buy loans in forbearance, leaving the debt piling up on the books of the lightly regulated companies that both originate and service home loans.
Details were still being ironed out, though FHFA was expected to announce a change as early as this week, the people said.
(Excerpt) Read more at wsj.com ...
On the Fox Business show this morning on person asked why the mortgage industry which was bailed out in 2008 was going to be bailed out again. Interesting question!
Woohoo! Uncle Sugar bails out some more profligates.
Well I can’t envision any problem with this sort of action.
Because the CEOs that pump up the lending numbers don’t have to give back their fat bonuses.
This is frikking ridiculous, the Banks which were bailed out 12 years ago are Still Holding a LOT of Foreclosed Homes from 2008 OFF BOOK!!!
There's been talk for years of recapitalization (and more recently, of the merging) of FNMA and FMCC -- and we too should never let a crisis go to waste.
I guess they think we were all asleep and didn’t notice how this same action started the 2008 recession. Learning from past mistakes seems to be a fable nowadays.
Entire 21st century has been a bunch of financial scams masquerading as policy.
Fanny and Freddie need to be closed forever.
What a shock:What’s old is new! We had viruses,economic “crisis”,bailouts,stimulus and the same scum sucking swamp parasites devouring our money ten years ago. Crisis to some is winning the lottery.
Sure Goldman Sachs and others are chomping at the bit. Bundling said mortgages that should never ever been given to those who couldn't even afford a down payment was the direct cause of the 2008 recession. We know the outcome. Plus, General Motors should have been allowed to fail. Sorry for their employees, but there were other jobs at the time.
Then sell ‘em overseas again, to see if THEY remember anything! :-)
OK, please allow me to provide some context. Imagine homeowners who recently bought or refinanced their home. At the time of the transaction, they were gainfully employed, had income and could easily afford the monthly payment.
Now, after the state and federal government forced the closing countless business, millions of homeowners are out of work. They now don’t have the income to pay. The transactions are recent and the loans have not yet been sold to Fannie or Freddie. In normal times, a loan with delinquent payments couldn’t be sold.
China created this problem, but our government created this job destroying lockdown. The sooner we all return to work the sooner life returns to normal.
Sure, but on the other side, people with cash on hand, ‘could’ find homes to purchase in a fire sale, but .gov isn’t allowing asset prices to fall. This is another example of propping up prices, instead of allowing a quick market correction or allowing younger generations to purchase homes at a cheaper rate.
While millions of renters face evictions. No help forthcoming for them. Soon housing will be deemed a luxury.
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