Fannie Mae's Foreclosure Properties Prevention Work

Federal National Mortgage Association or Fannie Mae handles troubled mortgage loans and decides who will get a loan.

According to the Federal Housing Agency data, the government-supported enterprise guarantees or owns nearly 18.3 million mortgage loans or a third of all home loans in the country. The company has to sift through over 440,000 home loans and determine who should save their homes from becoming repossessed properties and who are beyond help.

It employs experts who handle everything that has to do with home loans, such as evaluating the status of loans, educating vendors on handling troubled loans, renting foreclosure homes and renovating and selling foreclosure properties.

It handles hundreds of home loan cases each day. In fact, in its Dallas, Texas office, Fannie Mae tries to save about 10 million homes from becoming foreclosure properties.

Fannie Mae vice president of the servicing organization Kevin Brungardt compared the amount of work faced by asset managers of the company to playing in a World Series in terms of the volume of loans they manage, especially during this economic crisis.

Out of the 18.3 million distressed homes handled by Fannie Mae, 2.4 percent are in danger of becoming foreclosure properties.

According to analyst, the Obama Administration has been pressuring Fannie Mae to aggressively modify loans despite the possibility that the company will incur losses on the process. Both Fannie Mae and its sister company, Federal Home Loan Mortgage Corp. or Freddie Mac were put under conservatorship by the U.S. government due to financial problems.

“Inside Mortgage Finance” publisher Guy Cecala said that Fannie Mae and Freddie Mac have to abate foreclosure properties at all cost at their expense. He added that unlike lenders, who are also being pressured by the Obama Administration to modify loans, both government-sponsored enterprises have no choice not to go along with the Obama Administration’s foreclosure prevention program.

He believed that the administration’s campaign to reduce foreclosure properties may help many distressed homeowners. However, he pointed out that excessive loan modifications could trap homeowners in mortgages that may result again in payment delinquencies.

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