Together, Fannie Mae and Freddie Mac guarantee nearly half of all outstanding mortgages in the United States. They are the very epitome of "too big to fail," and indeed when the housing market came tumbling down and Fannie and Freddie were on the brink of collapse themselves, the government immediately stepped in, shelling out more than $125 billion in taxpayer dollars to cover their losses. Although the nation's housing recovery is still fragile at best, the burning question on everyone's tongue is, "What do we do with them now?"
Although higher than year-ago levels, existing-home sales declined slightly from January to February of this year, the National Association of Realtors (NAR) reported Tuesday. Sales of previously owned homes slipped 0.6 percent to a seasonally-adjusted annual rate of 5.02 million units in February. It marked the third consecutive month of sales declines. IHS Global Insight called February's numbers "further payback for the first-time homebuyers' tax credit that [originally] expired on November 30."
Seventy-seven percent of real estate professionals think home prices will either stay the same or decrease in the next six months, according to the results of a nationwide survey released by California-based HomeGain Tuesday. Agents and brokers queried expressed concern that home prices could be adversely affected by rising interest rates, expiration of the homebuyer tax credit, persistent unemployment, continued foreclosures, and the release of shadow inventory held by banks.
Homeowners in Washington are suing Bank of America, alleging the nation's largest lender is intentionally thwarting borrowers' requests to make loan modifications that would prevent homes from being foreclosed. As of the end of February, Bank of America had permanently modified nearly 21,000 mortgages under the Home Affordable Modification Program. Attorneys for the plaintiffs in the suit say BofA has made an affirmative decision to slow the loan modification process for reasons that are solely in the bank's financial interest.
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