Mo Money, Mo Money

The Office of Federal Housing Enterprise Oversight (OFHEO) announced Wednesday that it would be lifting the caps it had imposed several years ago to limit growth of Freddie Mac's and Fannie Mae's owned portfolios.

The caps had been instituted after both of the huge government sponsored enterprises (GSEs) had run into a lot of trouble over their rather creative accounting standards, their inability to file audited financial statements in a timely manner, and concerns over the two corporation's capital reserves.

OFHEO director James Lockhart made the announcement after Fannie Mae filed its 2007 financial statements on time and Freddie Mac said it would file its 3007 reports on Thursday. The caps will be removed effective March 1.

There has been considerable pressure from the mortgage industry and from some Congressional committees to lift the caps in order to free up more money for mortgages. The caps have limited the ability of Freddie and Fannie to purchase packages of residential mortgages that might not otherwise find a market in the present credit atmosphere.

Each of the GSE's has also been under a consent order which required them to, among other things, maintain a 30 percent capital cushion. These will stay in place for the time being but Director Lockhart said that OFHEO is working with them to undertake a thorough review and validation of the work they are doing to complete the requirements of their Consent Orders. "To the extent that OFHEO finds the Enterprise has fulfilled the requirements of its Consent Order and the Enterprise has continued to file timely audited financial statements, OFHEO will left the Consent Order,- and will discuss with management the gradual decreasing of the current 30 percent OFHEO-directed capital requirement."

Laid-off Workers get Help from California

This is a snippet of an article from Mortgage daily news. No matter your political tendencies, it looks like Arnold recognizes the severity of the issue. Too bad they can't come up with help like this for ALL laid off workers, not just mortgage types....

California Governor Arnold Schwarzenegger has announced a massive program to address a number of aspects of the housing slump in the state which has probably been harder hit by its effects than any other.
The various initiatives will use a variety of state and federal funds including a $5.6 million federal grant to retrain mortgage and banking industry workers laid off as a result of the subprime... more

"Lifeline" for People in Foreclosure

To our associates:

We wanted to give you our interpretation of the Lenders/Government’s Lifeline program announced last week for borrowers in foreclosure.

To summarize, the 6 top lenders in the country have offered to freeze the foreclosure process for 30 days, to allow borrowers (90 days late or more) a little breathing room, and to allow them come up with ideas to save their homes. They have offered, on a case by case basis, to freeze the interest rates on those loans for a period of up to 5 years, too. There are other steps they can take to help as well. As a company, we feel the program does not go far enough to address declining market values or address lender abuse, but the government has at least tried.

The key point to consider with this program is that it is for people who would like to KEEP their homes. If this is the case for you, we certainly do not want to stand in the way. Short Sale Group is there to help people who have considered all of their options, and decided that the best course of action is to sell - and ask the bank to settle for less.

If you have any questions, drop me an email and we will get back to you ASAP!