Freddie and Fannie Are Able To Buy More Mortgages!!!!

We are getting some excitement in the credit market.  The Office of Federal Housing Enterprise Oversight (Ofheo) have removed limits on the amount of mortgages Fannie Mae and Freddie Mac can buy as of March 1st, 2008.  Fannie Mae and Freddie Mac will now be allowed to buy more mortgages which will allow them to raise their portfolios.  Fannie Mae and Freddie Mac will be able to repackage more mortgages  into Mortgage backed securities (MBS) to sell to investors, freeing up liquidity in the housing market.

The market responded positively to this news.  Both Freddie and Fannie shares jumped 15%. The decision by the Ofheo came in response to poor earnings by both companies, a continuing drag in the housing and mortgage markets and disruptions in the credit markets.  Fannie Mae's Chief Executive Daniel Mudd said the company is pleased that demand for its mortgage guaranty business has surged in response to the market's need for liquidity. But he said that "this positive trend has been far outweighed by the negative financial impacts of rising mortgage defaults, falling home prices and extraordinary disruptions in the credit markets."  Fannie Mae has projected a 5-7% drop in home prices across the nation this year.

Another related Article:  What or Who Are Fannie Mae and Freddie Mac?



You can find AJ Nisen on Active Rain at Contra Costa California Mortgages.  Call AJ to talk about Mortgage Rates, Free Credit Report or visit AJ's website to use his mortgage calculator. 

Alan 'AJ' Nisen
Mortgage Loan Officer
Email: aj.nisen@bankofamerica.com
http://mortgage.bankofamerica.com/ajnisen 
http://www.activerain.com/ajn

 

4 Comments on Freddie and Fannie Are Able To Buy More Mortgages!!!!

Unfortunately as rates go up the net result will be neutral in my humble opinion PLUS someone still has to purchase the paper since FNMA & FHLMC do sell to the securitized world to some degree.

I hope this helps.

Good post.

02/27/2008 11:29 AM by Kirk Williams, #LMA 510-LO-32537 (Mortgage Advisory Group)

AJ, I guess this is some good news. We certainly need all the help we can get at this point. My market Poinciana FL is basically at a stand still right now. We can't give a house away!!! 34 closings this year to date and 1162 properties for sale!!  It just doesn't get much worse than that.

02/27/2008 11:33 AM by Bryant Tutas-Tutas Towne Realty, Inc

Great information for people.  thanks for posting these type og Blogs.

02/27/2008 12:18 PM by Dave Cheatham (Indigo)

BB,
I was wondering how you had all that time to put up some excellent posts.  As far as the market.  There is so much pressure on the credit market that it will force rates up and cost borrowers more with fee add ons.  That does not mean that the housing market will be affected negatively.  There is some news in my area that suggest we have hit bottom. I hope to see some stats for March and April for increase home sales and the prices being stable. AJ

02/27/2008 04:02 PM by Alan 'AJ' Nisen California Contra Costa Mortgage Officer (A Large Bank in America)

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Loan Officer: Alan 'AJ' Nisen California Contra Costa Mortgage Officer (A Large Bank in America)
Alan 'AJ' Nisen California Contra Costa Mortgage Officer
Lafayette, CA
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A Large Bank in America

Office Phone: (925) 688-3820
Cell Phone: (925) 963-5836
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AJ, as part of the Active Rain family, uses this forum to discuss issues that affect the Real Estate market, all aspects of Mortgages, Loans and refinancing, to build working relationships and friendships. AJ’s conversations include such topics as, the sub prime lending fallout, mortgage market changes, and localism (revitalizing downtowns, business growth, community volunteerism and events)



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