The Federal Housing Finance Agency (FHFA) announced the beginning of September that it has instructed Fannie Mae and Freddie Mac to raise guarantee fees (g-fees) on single-family home mortgages by an average of 10 basis points. The changes to g-fee pricing represent a step toward encouraging greater participation in the mortgage market by private firms, a goal set forth in FHFA?s Strategic Plan for Enterprise Conservatorships.
?These changes will move Fannie Mae and Freddie Mac pricing closer to the level one might expect to see if mortgage credit risk was borne solely by private capital,? said Edward J. DeMarco, Acting Director of FHFA.
FHFA Single Family Home Mortgage Increase
The increase is intended to help in the following ways:
Insure fairness through more uniform g-fees that Fannie Mae and Freddie Mac charge lenders who service large volumes of loans as compared to those who deliver lesser volumes;
Reduce cross-subsidies between higher-risk and lower-risk mortgages by increasing gfees on loans with maturities greater than 15 years more than on home mortgage loans of shorter-maturity.
Understanding How Foreclosure Proceeds
While it varies by State, in almost every State, Minnesota's foreclosure time line involves the auction of a property by a representative of the county court or the lender in order to handle the debt a homeowner could not handle. Read more about the Minnesota Mortgage Program here.? Here is how it usually proceeds:
The investor usually gives instructions to the loan servicer to bid at or near the value of the debt.
The servicer usually wins the bid because foreclosure generally occurs only when the debt is greater than the value of the property.
The servicer or investor must then manage the house (mowing the lawn, snow removal, protect from vandalism, etc.), take care of all its repairs
Sell it through normal real estate channels, hoping to lower the final loss from what would otherwise have been realized if a third-party bidder had purchased the property at the foreclosure auction.
Don't Be Quick To Walk Away From Your Mortgage
FHFA also announced that states can anticipate hearing more about risk-based pricing soon, as strong efforts are in place to assist homeowners with more reasons to actively seek alternatives to foreclosure. Don't give up. Don't walk away from your mortgage. Housing recovery experts believe that 70 to 80 percent of all loans at 90-day delinquency can still be reinstated without extreme measures or assistance. Home loan borrowers need to proceed in that direction; the greatest danger is that struggling homeowners will give up hope or panic and either walk away from their properties or use the legal system to forestall what they believe to be inevitable foreclosures.
The best alternatives involving the least costly results to homeowners, and everyone, are those that keep borrowers in their homes, and the next best are those that assist borrowers in getting out of current over burdensome financial responsibilities of homeownership in a more dignified and less costly manner than foreclosure
Jenna Thuening, a 
Certified Distressed Property Expert helps homeowners find FHFA alternatives to foreclosure.
11200 W. 78th St
Eden Prairie MN 55334
Jenna's home page: homedestination.com
If I'm out in the field, you may quickly reach me by email: jenna@homedestination.com and note how I can help you, or leave a message on my voicemail and I will get back to you as quickly as possible.
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