A Brief Explanation About Fannie Mae and Freddie Mac

1
Fannie Mae and Freddie Mac

• Learn How to Take Advantage of Fannie Mae
  Foreclosures Freddie Mac foreclosures
•  

2
A Brief History Fannie Mae

• Originally established in 1938 as a
  government-sponsored enterprise (GSE) under
  President Roosevelts New Deal package, the
  Federal National Mortgage Association (FNMA, or
  Fannie Mae) sought to expand the secondary
  mortgage market
•  

3
A Brief History Fannie Mae

• In 1968, Fannie Mae converted to a publically
  traded company yet retained its government
  backing which gave it an edge over other private
  mortgage companies in the industry

4
A Brief History Fannie Mae

• Fannie Maes government backed loan guarantees
  and its ability to borrow at much lower interest
  rates drew investors and meant that it could buy
  the mortgages of foreclosed properties and other
  mortgages from commercial lenders in bulk
  allowing for more available and affordable housing

5
A Brief History Freddie Mac

• Freddie Mac was created in 1970 in order to
  provide Fannie Mae with competition
•  
• Also created as a GSE, Freddie Mac enjoyed the
  benefits of government backing and borrowing at
  low interest rates

6
Providing the American Dream

• From 1970 onward, the secondary mortgage market
  was dominated by Fannie Mae Freddie Mac  
• As of 2008 and the beginning of the housing
  collapse and foreclosure crisis, Fannie Mae
  Freddie Mac together owned or guaranteed roughly
  half of the countrys mortgage market worth 12
  trillion

7
Recent Changes

• In September of 2008, both Fannie Mae Freddie
  Mac were placed into conservatorship by the U.S.
  Treasury Department
•  
• These organizations are now under the supervision
  of the FHFA, or Federal Housing Finance Agency
•  
• Fannie Mae Freddie Mac are now run much like
  HUD

8
Great Deals on Foreclosed Properties

• Taking advantage of Freddie Mac Fannie Mae
  foreclosures is an excellent way to attain great
  deals and save money on foreclosure homes and
  properties
•  
• Savings of up to 50 of a homes appraised value
  are common and these great deals are available to
  anyone

9
How It Works

• Most homes which Fannie Mae Freddie Mac have
  participated on revert back to them when
  foreclosed upon
• Their foreclosed homes are then turned over to
  real estate agents who provide a Brokers Price
  Opinion and repair recommendations
• Certified appraisers provide valuations of the
  properties
• The properties are placed on the market via a
  silent auction

10
Fannie Mae Freddie Mac Properties

• These properties can be difficult to locate,
  therefore listing services are the best ways in
  which to find these great offers
•  
• Listing services allow you to browse, cull and
  prioritize potential interests
•  
• Because many listing services contain up-to-date
  information on foreclosure sales, an advantage
  can be gained in locating fast selling properties

11
Preparing to Buy Foreclosure Properties

• Narrow down your listings to a few selections
•  
• Obtain as much information on the properties and
  their sales as possible

12
Preparing to Buy Foreclosure Properties

• Visit the properties and assess their conditions
•  
• Note any additional costs for repairs and add
  these amounts to the expected sale prices
• Submit a written bid on the property via a
  qualified real estate agent

13
The Bottom Line

• Maximize the profit cushion between what is paid
  for the property and the appraised value of the
  property on the open market, minus estimated
  repair costs

14
Whats Required From Buyers

• A pre-qualification letter from a reputable
  lender
•  
• A filled out and signed Offer to Purchase contract

15
Whats Required From Buyers

• Fannie Mae Freddie Macs own Purchase Addendum
  must be included
•  
• The Offer to Purchase must contain language
  stating that the Purchase Addendum is part of the
  contract
•  
•  
• The Addendums directions must be signed by the
  buyer as well as the buyers agent

16
What The Purchase Addendum Is

• The Purchase Addendum is a legal documentation
  which presents parameters and guidelines to
  purchasers of their properties
•  
• Basically, the Addendum states that a property is
  purchased As Is, protecting the institutions
  from any future issues which may arise concerning
  the condition of the home

17
Purchase Addendum Outlines

• The Addendum also provides instructions to both
  individual home buyers and investors 
• Initial offers should be submitted in writing 
• Once a selling price is agreed upon, the buyer
  must complete inspection and respond back within
  10 days. If the buyer accepts the property, the
  process continues Under Contract 
• Although cash payments are preferred, Fannie Mae
  Freddie Mac also consider other payment options

18
Special Requirement For Investors

• Purchase requirements are slightly different for
  investors
•  
• 10 of the purchase price is to be set in earnest
  funds at the time of offer

19
Special Requirement For Investors

• A Deed Restriction is placed on the property
  which states that for three months after purchase
  the buyer cannot resale the property for more
  than 120 of the purchase price

20
For more Information
http//twitter.com/fcdeals http//www.foreclosure
deals.com/wp/feed/ http//www.linkedin.com/compan
y/foreclosure-deals http//www.facebook.com/Forec
losureDeals
http//www.foreclosuredeals.com/