Buying a Fannie Mae Foreclosure Home
Similar to Freddie Mac, Fannie Mae – more officially, “the Federal
National Mortgage Association” – is one of the larger companies in
the secondary mortgage market. In the secondary mortgage market,
lenders can sell mortgages to companies like Fannie Mae. Fannie Mae
buys these mortgages in order to replenish lenders’ funds, so these
lenders can continue to offer mortgages to homebuyers. Fannie Mae
foreclosures are homes that were last purchased with a conventional
loan that the lender sold to Fannie Mae.
After Fannie Mae buys a mortgage, it may keep the loan in its
portfolio. Fannie Mae also buys pools of mortgages from lenders and
issues mortgage-backed securities to investors, who earn a cut of
the interest of the mortgages. In either of these cases, if a
borrower becomes delinquent on their mortgage, Fannie Mae will do
their best to help the borrower out of their delinquency. The home
is foreclosed on as a last resort, and with foreclosure Fannie Mae
takes possession of the home. Then, like most lenders, Fannie Mae
sells the foreclosure to make back the money it lost on the
defaulted mortgage.
Fannie Mae owns a range of foreclosure properties, and each is
represented by a real estate agent (Fannie Mae will not directly
sell foreclosures to buyers). Like most foreclosures, while Fannie
Mae may complete some repairs to make the home more marketable,
their foreclosures are sold in as-is condition. Fannie Mae provides
financing for some of their foreclosures.
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