Fannie Mae Announces Deed for Lease(TM) Program

Dud? Joined: 12 Sep 2007 Posts: 17

Gee, so what will happen to investment property values in the neighborhoods where Fannie/freddie will now be landlords? Rent Schedules on appraisals?

The new business for old mortgage people...PROPERTY MANAGEMENT!!!

Wrecking crew Joined: 01 Nov 2007 Posts: 1556

Fannie just came back to the troph for 15 billion or so. (just the beginning)

Fannie now a landlord. (My dishwasher needs to be fixed)

Fannie now a landlord. (They screw up eviction notices and get a sympathetic judge)

Fannie now a landlord. (On hook for taxes)

Fannie now a landlord. (Why is my grass not cut?)

Fannie now a landlord. (After a year, what then? Sell the house? Why when people can rent cheaper)

I could go on & on but all I have to really say is:

Butts in Houses Laughing

Great call Catherine!!!!!!

Flash in the pan Joined: 22 Jul 2008 Posts: 69

I hope no one owns any investment/rental properties like I do. The Gov just killed the business.

I wonder how many investment property foreclosures they will have on their hands soon. If I have investment properties and I have to compete with the Gov, I probably wont be in business long...

Posted: Fri Nov 06, 2009 4:52 pm

This move is clearly not for the benefit of the borrower, nor is it for the benefit of the taxpaying citizen. It is purely an effort to hide true markdown losses that need to be taken at the time of a sale and loss!

Every house heading into default has deferred maintenance, once the borrower signs over the deed to FNMA I would expect even less maintenance to be performed on the home leading to an even steeper discounted value at ultimate disposition. Postponement of the liquidation is going to lead to even lower residual value of the asset in a "declining market" which makes me think that there will be no hurry to sell any of these rentals after the initial lease period. In fact there will be high odds that even when the former borrower leaves FNMA will seek other tenants to avoid liquidation losses...... no sale keeps a false valuation possible on their balance sheet. I would not be surprised to see FNMA seeking out section 8 subsidized tenants to fill the void making it a gov't owned property with "rent" provided by whoever is left in this country still able to pay taxes!

Butts in houses at a terrible expense to the economy as a whole and the housing market recovery gets postponed while we all get boned.

Wrecking crew Joined: 13 Feb 2008 Posts: 1702

This just gives me that sick anxiety that I need to buy more beans and ammo.

I know of more foreclosures coming now than combined in the last two years and much of it falls into the "strategic" category. People that bought big homes with big mortgages - now complaining about their big
underwater value - and just tired of throwing big money at the mortgage when they could rent something just as nice for so much less.

The majority of these folks are what I currently refer to as "screaming babies." They still have more is asset, net worth and income than most people dream of achieving - but outside of damaging their credit in a non-recourse state on a single first mortgage - they are not seeing a downside to basically saving several hundred thousand dollars.

This is a moral unwinding that we have never really seen in this country - justified down to a personal level on a massive scale because ...well basically corruption went unchecked from wall street to main street and largely got get out of jail free cards from corrupt halls of government.

I suspect when the basic pillars of society accellerate elective default rates we will see the brick wall come up fast and hard. All the models of bailout, subsidy, stimulus, etc. - are based on economic projection factors - and staggering REO hitting the market. Maintaining some semblance of bottoming and improvement.

But with elective defaults - broadening into high end homes - with loan balances representing the equivalent of 4-5 average homes in the market - and a non-existent purchase market for them - WOW!

It just doesn't stop coming.

Posted: Fri Nov 06, 2009 11:38 pm

suzyQ wrote:

This just gives me that sick anxiety that I need to buy more beans and ammo.

I know of more foreclosures coming now than combined in the last two years and much of it falls into the "strategic" category. People that bought big homes with big mortgages - now complaining about their big
underwater value - and just tired of throwing big money at the mortgage when they could rent something just as nice for so much less.

The majority of these folks are what I currently refer to as "screaming babies." They still have more is asset, net worth and income than most people dream of achieving - but outside of damaging their credit in a non-recourse state on a single first mortgage - they are not seeing a downside to basically saving several hundred thousand dollars.

This is a moral unwinding that we have never really seen in this country - justified down to a personal level on a massive scale because ...well basically corruption went unchecked from wall street to main street and largely got get out of jail free cards from corrupt halls of government.

I suspect when the basic pillars of society accellerate elective default rates we will see the brick wall come up fast and hard. All the models of bailout, subsidy, stimulus, etc. - are based on economic projection factors - and staggering REO hitting the market. Maintaining some semblance of bottoming and improvement.

But with elective defaults - broadening into high end homes - with loan balances representing the equivalent of 4-5 average homes in the market - and a non-existent purchase market for them - WOW!

It just doesn't stop coming.

Percentage-wise, borrowers with $3k-$4k a month PITI payments are having more problems staying current than the ones with $1000 payments. High income earners have been hit harder than anyone with layoffs and cutbacks and are facing even higher tax hits in the coming months.

Downsizing, is the only smart option and if it means short sale, deed in lieu, foreclosure and 3-4 years of low credit scores, then it is what you have to do.

Wrecking crew Joined: 13 Feb 2008 Posts: 1702

I understand layoffs and reduced income. I'm talking about people that are telling me they only have $200,000 left in cash reserves that are bailing.

Or starting to hide assets and max out credit now so when they stop paying the mortgage in 6 months and then file bankruptcy in 12 months they will still have a giant stash.

Basically commiting fraud. If you have the ability to pay your mortgage and just don't want to because of value and want the bank that lent you the money in the first place take a haircut for a couple hundred thousand while you keep your stash .... I don't see a fine distinction that this is that much different than walking in the door or the bank and robbing them - actually involves a lot more money than your average heist.

C-4 Joined: 24 Mar 2008 Posts: 1191 Location: Hell

suzyQ wrote:

I understand layoffs and reduced income. I'm talking about people that are telling me they only have $200,000 left in cash reserves that are bailing.

Or starting to hide assets and max out credit now so when they stop paying the mortgage in 6 months and then file bankruptcy in 12 months they will still have a giant stash.

Basically commiting fraud. If you have the ability to pay your mortgage and just don't want to because of value and want the bank that lent you the money in the first place take a haircut for a couple hundred thousand while you keep your stash .... I don't see a fine distinction that this is that much different than walking in the door or the bank and robbing them - actually involves a lot more money than your average heist.

BK dont allow that to happen you can only have a few thou to your name in the bank as far as liquid assets.. if you have ppl doing that with 200k in the bank the court will seize a massive % like 90%! If they have it in 401 or some other retirement type account then they can get asset protection but again if its actual cash, stocks, bonds, mutual funds etc liquid the court will seize it. If they "buy" a family member a car the court will seize it. if they "pay" back a personal loan to someone the court will go to that person say prove you loaned them the money when they cant they will seize it... I think you all get the hint. You have someone trying to hide the money the court will find it and take it to payoff creditors.

Wrecking crew Joined: 13 Feb 2008 Posts: 1702

BK doesn't look for assets that disappeared over a year ago unless
someone explicitly tells the court they existed and where they went.
And there won't necessarily be a BK if they just bail on a million dollar
loan on a primary residence in a non-recourse state.

Dyn-o-mite! Joined: 09 Jan 2008 Posts: 389

suzyQ wrote:

This just gives me that sick anxiety that I need to buy more beans and ammo.

I know of more foreclosures coming now than combined in the last two years and much of it falls into the "strategic" category. People that bought big homes with big mortgages - now complaining about their big
underwater value - and just tired of throwing big money at the mortgage when they could rent something just as nice for so much less.

The majority of these folks are what I currently refer to as "screaming babies." They still have more is asset, net worth and income than most people dream of achieving - but outside of damaging their credit in a non-recourse state on a single first mortgage - they are not seeing a downside to basically saving several hundred thousand dollars.

This is a moral unwinding that we have never really seen in this country - justified down to a personal level on a massive scale because ...well basically corruption went unchecked from wall street to main street and largely got get out of jail free cards from corrupt halls of government.

I suspect when the basic pillars of society accellerate elective default rates we will see the brick wall come up fast and hard. All the models of bailout, subsidy, stimulus, etc. - are based on economic projection factors - and staggering REO hitting the market. Maintaining some semblance of bottoming and improvement.

But with elective defaults - broadening into high end homes - with loan balances representing the equivalent of 4-5 average homes in the market - and a non-existent purchase market for them - WOW!

It just doesn't stop coming.

You think its bad now..wait till the $300 million dollar loan skyscrapers start defaulting all over the place.. remember..it takes a aweful amount of RESIDENTIAL loans to get to $300 million...and only ONE commercial property...