HUD secretary, Congress debate foreclosure plans.
Fannie Mae seeks government cash after 25-billion-dollar loss
By ALAN ZIBEL and ADRIAN SAINZ – feb
26, 2009 found at google.com
Chart
shows new home sales for the past 13 months, seasonally adjusted1c x 2 1/4
inches; 46.5 mm x 57 mm
WASHINGTON (AP) — Against a backdrop of record-low new home sales and
ballooning losses from foreclosures, Housing Secretary Shaun Donovan told
lawmakers Thursday that the lending industry is set to launch the Obama
administration's $75 billion foreclosure prevention program next week.
Final details will be released Wednesday, but Donovan said the plan will
allow borrowers with big debts from car loans, credit cards and unaffordable
mortgages to have their home loans modified to lower the monthly payment, even
if they are not in default.
DO
YOU STILL BELIEVE IN FANNIE MAY ? They just have a loss the size of Croatia
BNP !! read foreclosure plans
Borrowers who owe up to 5 percent more than their home's current value will
be able to refinance, if their mortgages are held by mortgage finance companies
Fannie Mae or Freddie Mac. At the same time, loan modifications will be
available for borrowers who owe up to 50 percent more than their home's
currently value, Donovan said.
Testifying before Senate lawmakers, Donovan said "we expect to see large
numbers of modifications happen very quickly," and hopes it would cause
foreclosure rates to drop as soon as April.
Hours later, Fannie Mae said it needs $15.2 billion in government aid —
though that figure is expected to grow — because it lost nearly $59 billion
last year as the foreclosure crisis mushroomed.
This is the first time Fannie Mae has asked for government money, but the
Treasury Department last week said it is doubling the lifeline for the Fannie
Mae and Freddie Mac to $200 billion each.
The two mortgage finance companies, which were seized by the government last
September, own or back about half of the nation's mortgage loans.
Foreclosures also were an issue in the House, where an expected vote on a
housing relief plan was delayed. Democrats were at a stalemate over a measure
that would allow bankruptcy court judges to reduce the principal and interest
rate on mortgages for homeowners saddled with heavy debt.
The vote was derailed after a group of moderate Democrats expressed concerns
about how the bill would affect homeowners who are not facing bankruptcy but are
still struggling to make their mortgage payments.
Consumer advocates and most Democrats regard the measure as crucial, claiming
it's the only way to force loan servicers to take steps to help homeowners stay
in their homes. Most of the mortgage industry remains ardently opposed, and has
been fighting to block the proposal.
House leaders postponed a vote until Tuesday to give Democrats time to meet
with Donovan about how the measure fits with the Obama administration's housing
plan. The Senate is expected to take up the legislation within two weeks.
In the Senate, Democrats praised the Obama administration's plan to spend $75
billion from the $700 billion financial bailout fund to keep up to 4 million
U.S. homeowners out of foreclosure.
But a prominent Republican, Sen. Richard Shelby of Alabama, was skeptical. He
countered that subsidies will go to the same major lenders already receiving
billions in taxpayer bailout money.
The administration's plans are "a further bailout to the very banks that
helped us get into our current situation," Shelby said.
The delayed House vote and Senate bickering came amid more disquieting news
for the housing market.
The Commerce Department reported Thursday that new home sales fell 10.2
percent to a seasonally adjusted annual rate of 309,000, the worst showing on
records going back to 1963. It also was weaker than economists expected, and
shattered the previous all-time monthly low set in September 1981.
The median sales price fell to $201,100 in January, a record 9.9 percent drop
from the previous month. The median price is the midpoint, where half sell for
more and half for less.
Lower prices, coupled with low mortgage rates, have helped restore
affordability in some once-heated markets, but potential homebuyers are still
wary.
The average rate for 30-year fixed mortgages this week was 5.07 percent, up
slightly from 5.04 percent last week, but still near historic lows, Freddie Mac
reported Thursday.
"Lower house prices and affordable mortgage rates have yet to spur
housing demand," Frank Nothaft, Freddie Mac's chief economist, said in a
prepared statement.
Adrian Sainz reported from Miami. Associated Press writers Julie
Hirschfeld Davis and Jeannine Aversa contributed from Washington.
Fannie Mae seeks government cash after 25-billion-dollar loss
by Marina Dimova on Fri, 02/27/2009 found at visitbulgaria.info
US mortgage giant Fannie Mae reported a 25.2- billion-dollar quarterly loss
on Thursday and asked the government for cash to keep it afloat.
Fannie Mae asked for a 15.2-billion-dollar capital infusion from the US
Treasury and said it could need more if the housing and credit markets continue
to worsen.
It was the sixth-straight quarterly loss for the lender that was taken over
by the government last year. Losses for the year came to 58.7 billion dollars.
In 2007, Fannie Mae had 3.6 billion dollars in fourth quarter losses and
yearly earnings of 2.1 billion dollars.
The company had said last month it would seek the cash infusion in its first
withdrawal under a programme established last year to keep it and its sibling
Freddie Mac afloat.
Treasury officials have pledged up to 100 billion dollars each for Freddie
Mac and Fannie Mae. Both are government-chartered firms which finance or buy
half of all the nation's mortgages, estimated at 12 trillion dollars.
In September, the US government seized control of Fannie Mae and Freddie Mac
and replaced their executives as the US financial crisis came to a head. It also
set up a fund to keep the mortgage giants solvent and has since provided
bail-outs to some of the country's largest financial firms and automakers.
The US mortgage crisis spurred by sub-prime loans to borrowers with poor
credit is blamed for sending the country's financial institutions into a
tailspin which then drove the economy into a recession.
“There’s so much inventory out there that the buyer can pick and choose,” said Susan Sirles Fidler, a Realtor at Re/Max 10, Oak Lawn. But she cautioned, “The stuff that’s almost free is almost free because it’s going to cost you an arm and a leg to put it back together. It’s not buyer beware as much as buyer be smart.”
