On October 24, 2011 the Federal Housing Finance Agency (FHFA) broadcasted a series of changes to the previous Making Homes Affordable Refinance Program. These changes were made in the hopes of targeting even more homeowners that are currently underwater. The program changes were a collective effort between lenders, mortgage insurers, and industry participants under the FHFA’s Direction. The goal is to offer more stability to Fannie Mae and Freddie Mac by offering refinancing opportunities to borrowers.

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Generating sustainable, consistent income in retirement is a challenge for many retirees. Using the home equity has always been an option, but how to use the equity without losing the home for the surviving spouse or heirs is usually a concern. This article explores how incorporating life insurance into the plan can guarantee to keep the home.

Fannie Mae and Freddie Mac are operated since 1968 as government sponsored enterprises (GSEs). This means these Two are privately owned, owned by shareholders but are financially supported by the US Federal Government. These GSE’s purchases mortgages from the lenders who originate them and provide a secondary market in home mortgages. They hold some of these mortgages, and some are “securitized” sold in the form of securities which the GSEs guarantee.
This past weekend the inevitable happened. The government stepped in to take over Fannie Mae and Freddie Mac. These two companies were placed into a conservatorship in an effort to bring some stability to the housing and mortgage market.
Who are the winners and losers from this landmark move?
Winners: The investors. By investors we mean the companies that buy the debt or securities Fannie and Freddie created from the mortgages they funded. The federal government is now responsible for losses on these investments — a move which the government hopes will attract investors back to mortgage securities and create the much needed funds to fuel mortgage originations.
Losers: The shareholders. The shares prices have been in a steady decline and the move to take over the companies is not a move to buy out the shareholders. People who invested in Fannie Mae or Freddie Mac stocks are likely going to continue to be upside down (lose money on their investment) until the future of these entities is decided and, should they remain public, regain value in their share — meaning a long, long time.
As for homeowners, we will have to wait and see. With the government stepping in that should clear the way for mortgage rates to drop down. However, lending standards are still up in the air. We may not get a decision on how conservative or liberal the lending standards will be until after the next president is elected. My guess is we are likely to see stricter underwriting guidelines that are more inline with what these two companies used originally; requirements for larger down payments and more conservative debt to income ratios which may make mortgages more difficult to obtain for many.
So what’s your bargain?

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Your dream house may not be everyone else idea of “Home, Sweet Home,” but it’s going to be all yours. Now if you can just figure out how to finance that bit of real estate. Not wanting to leave any stone unturned, you’re on this site to get some background for your decision. One kind of mortgage calculator (“how much house can I afford” type) takes a look at your budget and, with your input, works out how much you can afford to pay, either monthly or annually. Some are not comprehensive enough to take into account taxes, insurance and the increased costs of home ownership.

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