HelocBasics » Fannie Mae

No Fannie / Freddie HELOC Foreclosures During Holidays

Jamie — Thu, 27 Nov 2008 06:13:26 +0000

Fannie Mae and Freddie Mac won’t be perusing foreclosures during the holidays. Even those facing HELOC foreclosure are off the hook – at least for a few weeks.

MarketWatch reports:

“Fannie and Freddie will not foreclose on occupied homes from Nov. 26 to Jan. 9. Fannie said it will reach out to 10,000 affected borrowers and Freddie will reach out to 6,000 affected borrowers.”

For more information about the foreclosure process see: HELOC Foreclosures.

A Home Equity Line of Credit From Congress?

Jamie — Thu, 24 Jul 2008 07:28:15 +0000

Government sponsored enterprises Fannie Mae and Freddie Mac may no longer be in trouble, thanks to a generous resolution passed by the House. The new bill gives these organizations access to an unlimited amount of money, which can be used to purchase mortgages from struggling lenders.

Not everyone appreciates today’s decision. A Seeking Alpha blogger compares it to receiving a HELOC from the government:

“The bailout plan for mortgage-struck Freddie and Fannie includes something awfully similar to the sort of home equity line of credit [HELOC] nuttiness that got the mortgage market in trouble in the first place.”

Will tax payers appreciate this move to counter the lending crisis? Or will they resent national funding being used to bail out bad loans?

The Senate is expected to also approve bill, which should make its way to the president’s desk as early as this weekend.

How a HELOC Works

Fannie Mae Issues New HELOC Rules

Jamie — Fri, 28 Mar 2008 05:54:32 +0000

Fannie Mae (the largest national provider of home loan funds) recently issued new rules that will affect many HELOC customers. The Boston Globe reports:

“Fannie Mae will no longer allow homeowners to refinance loans it either owns or has packaged into bonds at typical loan-to-value ratios in areas with falling home prices if they’re going to use proceeds to pay off a second mortgage, according to a memo to lenders dated Monday and posted on its website.

The government-chartered company, which owns or guarantees almost $3 trillion of US mortgages, four months ago reinstated a policy that requires lenders to boost by 5 percentage points the required size of down payments or borrower equity on new lending before Fannie Mae will accept the debt, part of a series of changes to standards at the company and rival Freddie Mac amid the largest drop in US home prices on record.”

In short: If you live in an area with falling home prices, you may not be able to refinance your first mortgage in order to pay off your HELOC. Additionally, new HELOC customers will need to have more equity in their homes before taking out a home equity line of credit.

These new rules apply to borrowers with mortgages using Fannie Mae funds. (Note that Fannie Mae is not a lender; but many lenders such as Wells Fargo and Countrywide use Fannie Mae funds to create loans.)