It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Thank you.
Some features of ATS will be disabled while you continue to use an ad-blocker.
The Inspector General for the Federal Housing Finance Agency concludes that Fannie Mae and Freddie Mac would benefit from getting some help in pursuing those who walk away from their mortgage, despite their ability to pay.
In 2011, the recovery rate for the GSEs stood at 0.22%, which is equal to $4.7 million in clawed back losses. This is out of a potential pool of 35,321 deficiency accounts worth $2.1 billion.
"Further, with 1.1 million seriously delinquent mortgages looming on the foreclosure horizon FHFA's timely guidance on deficiency management process may help the Enterprises recoup future losses and protect taxpayers' investment in their financial health," the report states..
The Inspector General suggests the FHFA begin to routinely gather info related to deficiencies at the GSEs. After analyzing the data, the FHFA should then manage the deficiency collection process.
Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases
The Federal National Mortgage Association (FNMA; OTCQB: FNMA), commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.[2] The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS),[3] allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts.