A Brief Explanation About Fannie Mae and Freddie Mac - PowerPoint PPT Presentation

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A Brief Explanation About Fannie Mae and Freddie Mac

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This presentation explains the history, functions and advantages of Freddy Mac and Fannie Mae as well as their role in the current foreclosures crisis. For more information and resources related to foreclosures, visit ForeclosureDeals.com. – PowerPoint PPT presentation

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Title: 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/
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