Monday, April 26, 2010

Fannie & Freddie....Rearranging Deck Chairs

Here's an article that broached the subject of buying a foreclosed home from a *bank*:

Foreclosures Can Offer Deals, but Buyer Beware

Fannie Mae does give prospective homebuyers a leg up. Last month, it introduced a program that shuts out investor buyers for the first 15 days a home is on the market. Moreover, Fannie also has a financing program, which allows buyers to put down as little as 3 percent and doesn’t require them to carry mortgage insurance. It also provides loans that allow borrowers to wrap in costs for home renovations.

Freddie is testing a program that also initially shuts out investor buyers, and it is currently offering consumers who buy one of its properties up to 3.5 percent of a home’s purchase price, which can be used for closing costs, moving or even furnishings. The program was recently extended to buyers who submit a purchase offer by Jan. 31 and close by March 26. Primary homebuyers are also eligible for a two-year warranty on certain home repairs.

The title - Buyer Beware - is obviously ridiculous.

It's more like - Buyer Rejoice!

Rejoice because they don't have to compete with *investors*, Fannie will *finance* the purchase (i.e. merely change the name on the house!), no mortgage insurance is needed, AND Freddie will even donate what amounts to a taxpayer-backed HELOC on top of the taxpayer-backed no-money-down mortgage!

This country is doomed.

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