Your Questions Answered
In today's post, we're answering questions submitted by our readers on topics ranging from the ways we're fostering affordable homeownership to the latest data on mortgage delinquencies and homeowner debt. While we don't have space to tackle every topic you've raised, I want you to know we appreciate your readership and candid feedback. Keep writing – and we'll respond to as many of you as we can.
Question: A recent blog post mentions how Freddie Mac encourages owner-occupants to purchase REO properties. What specific rules are in place? (Submitted by Larry C.)
Answer: When a borrower has trouble paying their mortgage, our first goal is to help them avoid foreclosure. But if we've exhausted every option and foreclosure becomes a reality, Freddie Mac takes ownership of the home and our HomeSteps real estate sales unit manages the property.
The bulk of HomeSteps' marketing and sales efforts are aimed at attracting owner-occupants, and may include incentives for both real estate agents and prospective homebuyers.
Our First Look Initiative gives owner-occupants and organizations involved in community stabilization the exclusive opportunity to purchase a HomeSteps property during the first 15 days it's listed (30 days in Nevada). Without competition from investors, ordinary buyers have a better chance of achieving their dream of owning a home. Thanks to First Look and other initiatives, we sell about two-thirds of the homes we own to owner-occupants.
Question: I want to know if there are any programs that can help a previous homeowner who had some difficulties recently get back on track to fixing credit and budgeting for future homeownership. (Submitted by Jessie L.)
Answer: Absolutely. We recommend you reach out to a free housing counseling service approved by the U.S. Department of Housing & Urban Development (HUD). Housing counselors often work for nonprofit organizations and are trained to help you better manage your finances and rebuild your credit. They can help you create a savings and spending plan that moves you once again toward homeownership.
Counselors help millions of people each year to regain their financial footing. Call HUD at (800) 569-4287 or visit their Web site for a list of approved housing counselors in your area.
Question: What is the U.S. total mortgage dollar value and the percentage delinquent? (Submitted by A.B.)
Answer: According to the Federal Reserve, total single-family mortgage debt outstanding (MDO) in the U.S. at the end of March was $10.5 trillion, down from a high of $11.2 trillion at the end of the first quarter of 2008. The U.S. Mortgage Bankers Association reports that nationwide, the single-family serious delinquency rate (loans 90 days or more overdue) was 8.1 percent on March 31, 2011. In comparison, Freddie Mac's was just 3.63 percent.
Question: Is Freddie Mac just selling off the stuff it owns with no intention of being around for homeowners in the future? In other words, are you closing up shop or not? (John C.)
Answer: Ultimately, that's something policymakers will decide. I can tell you they're discussing a wide range of possibilities – and their decisions will help determine the future of the entire U.S. housing finance system.
But that's tomorrow. Today, Freddie Mac is supporting the U.S. housing market – which remains fragile – by keeping mortgage funds flowing and providing needed stability. The $105 billion in mortgage loans and mortgage-related securities we bought or guaranteed in the first quarter of 2011 helped 430,000 families buy a home and made rental housing possible for another 83,000 families. We also helped more than 62,000 struggling borrowers avoid foreclosure.
Freddie Mac has been asked to play a vital role in moving the nation toward economic recovery. We take that responsibility very seriously, and that's where we've focused our work.
Have a comment or question about this post? Email us to let us know what's on your mind.