Fannie’s Done It Again

In yet another major move by Fannie Mae, the company has announced that it will cover the closing costs on purchases of its repossessed properties. Basically this means that buyers will receive 3.5% of the final sales price. This money can be used towards closing costs, or for new appliances.  (Yes, that Ferrari in my driveway is an appliance!)

Closing on the house must be completed by May 1, 2010. Another incentive they are offering is only requiring 3% down on house purchases through HomePath Mortgage.

Fannie Mae has finally wised up to the fact that the best way to help the market recover is to get those foreclosed properties off the market. They’re hoping that many buyers taking advantage of the federal tax credit, for this additional help may move some of those properties.

This may or may not have something to do with Fannie’s recently released date (though not news to us) that the rate of delinquent loans has escalated. Meaning we’re going to see a flood of new foreclosures. Which means Fannie knows the value of its inventory is going to be worth less than Obama’s Nobel prize soon. So their philosophy is “get ‘em moving now.”

We’ll see how this drama plays out… But we’ve seen it coming since the middle of last year. The key is to keep the properties moving and not let this shadow inventory of foreclosures turn into a nightmare. We’ll  keep doing our part, helping honest, decent folks find their way out of debt and into new homes.