Fannie Mae REO properties

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A joint-stock company Fannie Mae was set up in 1968, but actually the company itself appeared some years earlier, in 1938. It is important to stress out, that in 2008 Fannie Mae was put under the conservatorship of Federal Housing Finance Agency or shortly - FHFA. This operation was held by James Lockhart, the FHFA director.

Take into consideration, that the Fannie Mae has to maintain quite high liquidity ratio on foreclosureℜ estate market as far as it deals with REO. It is the main reason the Department of Treasury of USA has decided to invest more then 200 billion US dollars into this company. Currently Fannie Mae acts on real estate markets as GSE that means government sponsored enterprise. The latter use the Fannie Mae foreclosures in order to maintain the liquidity ratio on american mortgage markets.

More over Fannie Mae participates in operations held on secondary market, it purchases the mortgages and as a result bad debts turn into Fannie Mae REO. To obtain means for such deals the Fannie Mae transforms its foreclosures into securities, so it enables real estate buyers to obtain the loan. All Fannie Mae activities can be described as three trends: single family and housing development, operating on capital market. More over Fannie Mae is operating on the territory of all the United States of America, everywhere from one coast to another.

But all Fannie Mae trends mentioned earlier are united with a common goal, because the mission of the company is to maintain the relatively low interest rates on mortgage markets, so it will be available for clients. And of course Fannie Mae aims for getting higher profit operating with its REO.

Use this website to search thousands of Fannie Mae foreclosed homes including a lot of other bank foreclosure properties and government foreclosures

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Post foreclosures (REO)

REO property or real estate owned property belongs to banks. How does it happen that banks own a real estate? Well, it is easy to understand: bank gives a loan, so mortgage appears, if client cant pay his dept and if there are no ways of foreclosure avoiding, the house becomes the property of financial organization. It may seem that foreclosures can’t bring high profits as bank want to sell it offering the price which will at least cover the amount of the first loan. On the other hand, if you will be more attentive, you will see some ways to benefit greatly from buying a foreclosure house.

It may be the situation, when more then one loan is secured to the real estate; actually it happens quite often nowadays. In case second lender doesn’t make payments to the first lender and starts own foreclosure procedure, in this case the second lender is not part of foreclosure process any more. That is the main reason why plenty of second mortgages are valued around 20% less then the normal market price.

Bank doesn’t benefit from being an owner of a house; it needs money to flow constantly to get higher net profit. More over keeping a foreclosure as an asset may cause additional expenses. That is why bank wants to sell this burden as soon as possible, and it is likely to accept even not high price, just to cover the dept.

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