Fannie Mae says it will cover the closing costs on purchases of its REO homes - an incentive the GSE hopes will help it pare down a bloated supply of repossessed properties. From now until May 1, people purchasing a home through HomePath, Fannie Mae's REO disposition operation, will receive up to 3.5 percent of the final sales price, which can be applied toward closing costs or used to purchase appliances for their new home. At the end of September, Fannie Mae had 72,275 REO properties on its books, marking a 7 percent increase year-over-year.
Investment funds capitalized by private equity firms and the U.S. Treasury have bought $3.4 billion in so-called toxic mortgage bonds under the administration's Legacy Securities Public-Private Investment Program (PPIP). A report released by the Treasury Friday details the first concrete progress made under the program since it was announced nearly a year ago. Eighty-seven percent of the PPIP portfolio holdings are private residential mortgage-backed securities. Thirteen percent are backed by commercial real estate assets.
Freddie Mac and 13 national and local nonprofit organizations have launched a pilot effort aimed at convincing discouraged delinquent borrowers to pursue mortgage workouts to save their homes from foreclosure. Freddie Mac has set up new Borrower Help Centers in Chicago, Phoenix, San Bernardino, and Washington, D.C. to provide mortgage counseling to delinquent Freddie Mac borrowers. The company is also launching a separate national phone campaign to reach distressed borrowers across the nation.
The congressionally appointed committee charged with overseeing the government's $700 billion Troubled Asset Relief Program (TARP) headed to Atlanta to hold a hearing on problems in the commercial real estate (CRE) sector. Specifically panel members are hoping to get a better grasp on how CRE woes will affect the banking system and the role of TARP in addressing that impact, hoping to stave off another real estate-induced financial meltdown.
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