Fannie Mae provides financial products and services that increase the availability and affordability of housing for low-, moderate- and middle-income families.
Fannie Mae is withholding and will not pay 44.4 million in bonuses to executives who caused and led the company into faulty accounting practices for the mortgage finance company giant.
The former CEO was forced to resign in 2004 and lost a 11.2 million dollar bonus. The CFO Timothy Howard lost a 3.4 million dollar bonus. Doesn’t it want to make you rant to hear of the gross overcompensation paid these honchos!
Fannie Mae and Freddie Mac are two of the nation's largest sources of financing for residential mortgages.
Good news for those applying for mortgages. Mortgage rates sunk to 6.18% with the benchmark 3-year fixed rate mortgage indicator, ending November 22. The rate had been 6.24% one week earlier and a year ago it stood at 6.8%.
Applications for new home buyers slid 2.8% and applications for all mortgages fell 3.7% for the week of November 17th.
“Mortgage borrowers continue to refinance their mortgages at a higher frequency than historically would have occurred given the rise in mortgage rates over this year,” said Frank Nothaft, Freddie Mac vice president and chief economist.
“But the wide proliferation of adjustable-rate mortgages (ARMs) originated in the past few years that are nearing their first interest-rate adjustment provides borrowers an incentive to refinance into a lower-cost ARM or fixed-rate mortgage. In addition, borrowers who might have considered a prime rate home equity loan for a home improvement or other need are turning to cash-out refinance options now that the prime rate is above 8 percent.
The Cash-Out Refinance Report also revealed that properties refinanced during the third quarter of 2006 experienced a median house-price appreciation of 33 percent during the time since the original loan was made, down from a revised 34 percent in second quarter 2006. For loans refinanced in the third quarter of 2006, the median age of the original loan was 3.4 years, about two months older than the median age of loans refinanced during the second quarter of 2006.
- http://originatortimes.com
Option ARMs remain a viable option in the mortgage environment. Despite the many problems in the mortgage market, lending brokers are still willing to make risky loans - including those that allow borrowers to make monthly payments that don't even cover the interest (so-called 'option ARMs'). Also , as reported in Money New York, still is surprisingly still widely available are 'no-doc' loans, which require no income verification, and mortgages with no downpayment according on the CNN Money report on Apr 14, 2007
Forecasts imply that even if there is a housing recovery, home prices will raise very much. The national median existing home price is making an annual decline. Dampening demand, the national inventory of unsold homes now stands at 7.4 months. A year ago the supply was 4.5 months. Home sellers need to trim prices further as incentive to buyers. The prevailing buyers market is alarmingly close to making the statistic of the first time since the Great Depression that there was a annual national median home price decline.
Mortgage risks are compounding the problems. The Center of Responsible Lending said that 2.2 million subprime home loans have failed or will end in foreclosure. The report said that 19% of subprime mortgages originated in the past two years will end in foreclosure. That is almost one in five subprime loans.
Most loans are not subprime. The MBA (Mortgage Bankers Association in Washington DC) says that recent foreclosure data indicates a 1.05% foreclosure rate with a 3.86 percent jump for subprime loans.
Some agency is twisting the truth. Nevertheless, a home for most families is the greatest financial asset a family has and losing it has a huge impact.
