I’m not too fond of bullet filled letters, so let’s hope I’m right Seriously though, I do know that Freddie and Fannie are buying and handling their own REO’s, and I’ve examined alot of transfers here in Tennessee to Freddie. There’s always a deed paper trail going from resident to Lender/Servicer to Freddie.
p.s. I hope to attend one of your finance workshops in the next 1-2 years. I find myself wishing everytime I do a deal that I had a good business line of credit to season with. That’s a step or two away right now, but I’ll get there eventually.
When a loan that is in a portfolio owned or packaged by Fannie Mae or Freddie Mac goes into default what happens? In particular, if the property is taken back and becomes an asset for sale from the ‘lender’ what is the legal entity that shows up on the MLS listing or on the deed?
I somehow have the impression that the asset will either show up under the name of the lender who was doing the servicing as they have to buy it back out of the portfolio or that it might show up as owned by FHA (or maybe HUD).
I was asked a question recently and I can not for the life of me remember the real facts.
fannie mae = federal national mortgage association
freddie mac = government national mortgage association
it’ll usually show as a deed from the lender to one of these entities upon completion of the foreclosure, if it is a loan backed by either one of these entities.
It will eventually show up in Fannie or Freddie’s name though Ed. The Lender will forclose, then deed to Fannie/Freddie in order to collect their insurance.
Fannie and Freddie take title and add to their REO’s, then list with local real estate agents for sale.
Both Fannie and Freddie handle the REO’s that they own in their portfolio?s. They both use seller/servicers to service the loan, but if you don’t pay, then they foreclose. This is for all of the mortgages that they OWN, not the mortgages that they back (insure).
I’m not too fond of bullet filled letters, so let’s hope I’m right Seriously though, I do know that Freddie and Fannie are buying and handling their own REO’s, and I’ve examined alot of transfers here in Tennessee to Freddie. There’s always a deed paper trail going from resident to Lender/Servicer to Freddie.
p.s. I hope to attend one of your finance workshops in the next 1-2 years. I find myself wishing everytime I do a deal that I had a good business line of credit to season with. That’s a step or two away right now, but I’ll get there eventually.
That?s not my understanding, but you have me doubting if I?m right, so I will check into it tomorrow. If you?re right thinks for the info, if you?re not, I?m going to send you a letter with a bullet in it.
Seriously Rob, it?s been a while since I?ve been involved or concerned on the process. From my recollection, the lender foreclosed and charged the insurer with the deficiency balance up to 80% after sale and it doesn?t occur at all as you have suggested, but as I said I will check into it.