Fannie Mae

The Obama administration's new plan to stimulate refinancings of FHA mortgages is likely to help large numbers of homeowners — even those who are deeply underwater — cut their monthly costs by switching to a loan with a rate below 4%. Here's a quick overview of the "streamline refi" program and what it will take for you to qualify. First, the baseline criteria: Your current home loan must be FHA-insured and must have been put on the Federal Housing Administration's books no later than May 31, 2009.

WASHINGTON - In a potential turning point for one of the biggest financial crisis bailouts, Fannie Mae reported a first-quarter profit and - for the first time since the government seized it in 2008 - does not need a quarterly infusion of taxpayer money. The $2.7-billion profit that the giant housing finance company posted Wednesday was its largest since the housing bubble burst in 2007 and is another signal that the real estate market finally might have hit bottom. "It's always hard to call a turn until everything is in the rear-view mirror," said Susan McFarland, Fannie Mae's chief financial officer.

Distancing himself from Republicans on housing issues, President Obama pitched a $5-billion to $10-billion plan to help a key segment of struggling homeowners — those still making monthly payments, but on underwater mortgages. Obama proposed Wednesday to help about 3.5 million people with good credit who are unable to refinance at historically low rates because their homes are worth less than their mortgages. He argued that those homeowners — and the country — couldn't afford to let the housing market bottom out, as many Republicans, including presidential candidate Mitt Romney, have advocated.

As California pushes to get more homeowners into a $2-billion foreclosure prevention program, some Fannie Mae and Freddie Mac borrowers may see their mortgages shrunk through principal reduction. State officials are making a significant change to the Keep Your Home California program. They are dropping a requirement that banks match taxpayers funds when homeowners receive mortgage reductions through the program. The initiative, which uses federal funds from the 2008 Wall Street bailout to help borrowers at risk of foreclosure, has faced lackluster participation and lender resistance since it was rolled out last year.

The most ambitious federal mortgage program to date aimed at millions of underwater homeowners is poised to take off in the coming two weeks, yet some key issues could hinder borrower participation. One of them involves something most owners know nothing about: Who was your mortgage insurer on your underwater loan? Though it was announced by the Obama administration late last year, "HARP 2.0" — the second version of the Home Affordable Refinance Program — will finally hit full stride around the middle of this month, when Fannie Mae and Freddie Mac finish tweaking their automated underwriting systems to accept applications, and lenders and mortgage insurance companies start handling large volumes of requests.

WASHINGTON — If you're one of the estimated 11 million homeowners burdened with an underwater mortgage, a new federal policy change could be good news: Starting in June, when you want to do a short sale to shed your mortgage and avoid foreclosure, you may not have to wait for months to hear back from your bank when you submit an offer from a potential purchaser. Instead, if your loan is owned or securitized by either of the dominant conventional mortgage market players — Fannie Mae or Freddie Mac — you can expect a response within 30 business days, with a final decision taking no more than 60 days.

WASHINGTON - Pressure is mounting on a key federal regulator to allow Fannie Mae and Freddie Mac to reduce loan principal amounts for struggling homeowners, after disclosures that a plan to do that was scuttled even though it was aimed at saving taxpayer money and helping to heal the housing market. Fannie Mae officials in 2009 supported principal reductions in some cases and crafted a pilot program that would have cost only $1.7 million to implement but could have provided more than $410 million worth of benefits to homeowners, according to internal company documents cited by two House Democrats.

Most borrowers never come into contact with mortgage finance giants Fannie Mae and Freddie Mac. That's because the companies work with lenders rather than consumers. Nevertheless, Fannie and Freddie play an essential role in the mortgage industry and the economy in general. Here are answers to some basic questions about these companies and your stake in them: -- What are Fannie Mae and Freddie Mac? They are called government-sponsored enterprises because they initially were formed by the federal government.

Homeowners who lose their jobs will be able to skip payments on loans backed by Freddie Mac for up to a full year under a new policy taking effect Feb. 1 at the mortgage finance giant. The change, doubling the forbearance extended to the unemployed, squares Freddie Mac's policies with those that its sister company, Fannie Mae, adopted in September 2010. The two firms, operating under government conservatorship since nearly melting down three years ago, own or guarantee more than half of all U.S. mortgages.

Could gloomy popular assumptions about how tough it is to get approved for a mortgage be scaring away large numbers of qualified people? Could the same worries — I can't come up with the big down payment I need, my credit scores are too low, my bank account has almost none of the "reserves" lenders want to see — put a needless damper on a housing recovery in the new year? You bet. Lenders and economists will tell you flat out: The lack of accurate information about the availability of loan programs designed to address special needs is discouraging far too many consumers from even considering an application, much less shopping around.

WASHINGTON — Government-controlled mortgage giant Freddie Mac is requesting $19 million in additional federal aid after posting a loss for the first quarter of this year. That is less than the $146 million that Freddie received from the government for the fourth quarter of 2011. The company received $7.6 billion for all of 2011 and $13 billion for all of 2010. McLean, Va.-based Freddie Mac said Thursday that its net loss attributable to common stockholders was $1.2 billion, or 38 cents a share, in the January-March period.

WASHINGTON - Pressure is mounting on a key federal regulator to allow Fannie Mae and Freddie Mac to reduce loan principal amounts for struggling homeowners, after disclosures that a plan to do that was scuttled even though it was aimed at saving taxpayer money and helping to heal the housing market. Fannie Mae officials in 2009 supported principal reductions in some cases and crafted a pilot program that would have cost only $1.7 million to implement but could have provided more than $410 million worth of benefits to homeowners, according to internal company documents cited by two House Democrats.

WASHINGTON — If you're one of the estimated 11 million homeowners burdened with an underwater mortgage, a new federal policy change could be good news: Starting in June, when you want to do a short sale to shed your mortgage and avoid foreclosure, you may not have to wait for months to hear back from your bank when you submit an offer from a potential purchaser. Instead, if your loan is owned or securitized by either of the dominant conventional mortgage market players — Fannie Mae or Freddie Mac — you can expect a response within 30 business days, with a final decision taking no more than 60 days.

WASHINGTON — Fannie Mae and Freddie Mac could save $1.7 billion by reducing the amount that some underwater homeowners owe on their mortgages, according to a preliminary analysis by the regulator for the seized housing finance giants. But a principal reduction program by the government-owned companies, which many economists, lawmakers and state officials have called for, would not solve the housing market's problems, the head of the regulating agency said Tuesday. In addition, it could encourage homeowners who are making their monthly payments to fall behind in order to reduce the principal on their loans, adding to the $188 billion in taxpayer money already pumped into the companies to keep them afloat, said Edward DeMarco, acting director of the Federal Housing Finance Agency.

WASHINGTON - A little-known career bureaucrat temporarily filling a key government job has emerged as the person with the most impact on the nation's battered housing market - and is rapidly making enemies. As the regulator over Fannie Mae and Freddie Mac, which own or back 60% of the nation's mortgages, Edward J. DeMarco is considered by a growing number of people to be the single biggest obstacle to the housing market recovery for opposing the use of a major foreclosure prevention measure.

Of the more than $600,000 that Fannie Mae and Freddie Mac spent sending 90 employees to a convention in October, nearly half was of “questionable value,” according to a government watchdog group. The inspector general of the Federal Housing Finance Agency released a report Thursday that casts a suspicious eye on how Fannie and Freddie used their money for the Mortgage Bankers Assn.'s annual convention in Chicago. In addition to covering employees' costs, the taxpayer-funded housing finance giants shelled out $140,000 on business meals and hosted dinners and another $140,000 to become high-level sponsors (whose benefits include advertisement space, exhibitor plots and admission to luncheons and parties)

Here's a sobering message for anyone who has a federally insured reverse mortgage or plans to apply for one: If you don't pay your local property taxes or hazard insurance premiums, you should know that the risk of losing your house to foreclosure is about to increase. Although the Federal Housing Administration, which runs the dominant reverse mortgage program, often had been lenient and forgiving in past years about tax and insurance delinquencies by senior borrowers, it's likely to take a more disciplined approach when it issues new guidelines this summer.

If you have lost a job and are in danger of falling behind on mortgage payments, here's some potentially important news: The two largest players in mortgages, Fannie Mae and Freddie Mac, are revising their policies on forbearance when unemployment interferes with the ability to stay current on a home loan. Forbearance means that a lender or mortgage servicing company will either suspend — cut to zero — or reduce required monthly payments for a specific period of time. On loans they own or have securitized, Fannie and Freddie are now directing servicers to forbear when a borrower can show a job loss.

The Treasury Department has sold the last of $225 billion in mortgage-backed securities it began buying during the financial crisis and announced the program designed to keep the housing finance market afloat made a $25 billion profit. The purchases of bonds from Fannie Mae and Freddie Mac started in October 2008 and continued through December 2009 as part of a series of unprecedented government interventions into the financial system. “The successful sale of these securities marks another important milestone in the wind down of the government's emergency financial crisis response efforts,” said Mary Miller, the Treasury's assistant secretary for financial markets, on Monday.

Pay for the top 15 executives at Fannie Mae and Freddie Mac will be cut 24% this year, led by plans to slash the total annual compensation for new chief executives of the housing finance giants to $500,000 from $6 million. Federal regulators issued the pay cuts in the wake of congressional outrage over salaries and bonuses at Fannie and Freddie, which were seized by the government in 2008 and have received about $183 billion in taxpayer money to cover huge losses in their mortgage portfolios.