Fannie, Freddie become home sellers

Government-sponsored mortgage giants Fannie Mae and Freddie Mac are becoming two of the nation’s largest home sellers, the Wall Street Journal reported. Fannie and Freddie have already taken back nearly as many homes in the first half of the year as they did all of last year. At the end of June, they owned more than 191,000 homes, double the amount of the 2009 total. Fannie wants to jumpstart the system, warning that it could crack down on lenders that are taking too long to reclaim homes once they have determined that the home is vacant or once they have exhausted foreclosure alternatives, such as modifications. Mortgage servicers, which collect fees from Fannie, could face fines if the process is dragged out. Once they take homes back, Fannie and Freddie must not only cover the utility bills and property taxes, but they are also relying on thousands of real estate agents and contractors to rehabilitate the properties. Fannie took a $13 billion charge during the second quarter just on carrying costs for its properties. While it is expensive for Fannie and Freddie to hold on to more unsold homes, they nevertheless want to minimize costly processing delays, the Journal said. [WSJ]

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