How Fannie and Freddie help homeowners. Fannie Mae was born in 1938, during the height of the Great Depression, when about 25% of Americans were defaulting on their mortgages.
- Many homebuyers confuse Fannie Mae and Freddie Mac. Fannie Mae is concerned with homeownership while Freddie Mac is an organization that insures mortgages. While both help Americans afford homes, Fannie Mae offers special programs directly for homeowners and offers home foreclosures for sale.
- Fannie Mae and Freddie Mac asked this week for cash infusions from the federal government at a time when they’re already in the crosshairs of Congress. Lawmakers and industry professionals have long argued that government-sponsored enterprises (GSEs) play an outsized role in the residential mortgage market.
One of the ways the federal government promotes homeownership is by providing financing through Fannie Mae (FNMA or Federal National Mortgage Association), Ginnie Mae (GNMA or Government National Mortgage Association), and Freddie Mac (FHLMC or Federal Home Loan Mortgage Corporation).
All of these organizations purchase residential mortgages and then convert the mortgages into securities for sale to investors, indirectly financing the purchase of homes. Because Fannie Mae and Freddie Mac are such an integral part of home financing, they end up with a huge number of foreclosure properties that they must sell, particularly in large markets, and many of these properties are not HUD or VA homes.
If you stumble upon what looks like a great deal, make your offer subject to a satisfactory home inspection. Delaying your offer until you can have the home inspected opens the possibility that another buyer will swoop in and buy the property. By making your offer subject to a satisfactory home inspection, you can get your offer in and then back out if the property needs a lot of work. Present your offer, but make sure it has a good contingency clause you can use for an emergency exit.
Fannie Mae And Freddie Mac Properties For Sale
Freddie Mac has a Web site devoted exclusively to promoting the sales of the homes it owns called HomeSteps. This site features a searchable online database containing information on thousands of homes, primarily REO properties, all across the nation. Freddie Mac lists most of the homes with brokers, but it also holds online auctions, so you can bid for properties in the comfort of your home or office.
HomeSteps provides very sketchy information about its homes, but it does provide the name and phone number of the real estate agent to call. When you find a home that interests you, call the agent to schedule a tour.
Freddie Mac’s older sister, Fannie Mae has her own Web site for homebuyers. Complete the search form to specify your desired price range and location, and click Search.
If Fannie Mae has any properties for sale that match your search criteria, the site displays a list of the available properties, and you can click a link to obtain additional information, including contact information for the listing agent.
Beginning June 3, 2019, Freddie Mac and Fannie Mae will each offer Uniform Mortgage Backed Securities (UMBS). Freddie Mac TBA-eligible Gold Fixed-Rate PCs will be eligible for exchange into UMBS beginning May 7 or investors can purchase newly issued UMBS beginning June 3.
UMBS are passthrough securities, each representing an undivided interest in a pool of residential mortgages. Freddie Mac offers 30-year fixed-rate UMBS in addition to 20-year, 15-year, and 10-year securities. UMBS are backed by fully amortizing mortgages and pay on a 55-day delay schedule. Freddie Mac guarantees the timely payment of interest and scheduled principal on all UMBS issued by Freddie Mac. Fannie Mae plans to offer an identical guarantee of timely payment of interest and scheduled principal on all Fannie Mae-issued UMBS. UMBS feature a payment delay of only 55 days from the time interest begins to accrue and the time the investor receives a payment.
TBA prefixes for UMBS and resecuritizations of UMBS issued by either Enterprise will align to the current prefix convention for Fannie Mae TBA-eligible securities.
|Product||UMBS and Supers Prefixes||Reverse REMIC Prefixes|
UMBS are 55-day payment delay TBA-eligible securities; if a 45-day payment delay TBA-eligible Gold PC security is exchanged for the corresponding UMBS, a one-time 10-day float compensation payment will also be paid to the investor.
This product overview is not an offer to sell or solicitation of an offer to buy any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac’s Information Statement and related supplements.