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Fannie Mae Update: Helping the Market through Today’s Challenges. Tracy Evans Gross Foreclosure Prevention April 21, 2009. © 2009 Fannie Mae. Trademarks of Fannie Mae. Fannie Mae Today.
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Fannie Mae Update:Helping the Market through Today’s Challenges Tracy Evans Gross Foreclosure Prevention April 21, 2009 © 2009 Fannie Mae. Trademarks of Fannie Mae.
Fannie Mae Today While we remain the largest secondary mortgage market participant, Fannie Mae operates under the conservatorship of the Federal Housing Finance Agency (FHFA), and has substantial financial backing from the U.S. Treasury. In conservatorship, our current focus is primarily on: • providing liquidity, stability, and affordability in the mortgage market • Immediately providing additional assistance to the struggling housing and mortgage markets
A Housing Market in Crisis • Home prices falling nationwide • Loss of trillions of dollars in real estate value • Millions of families “underwater” • Millions of homes in foreclosure or at risk • Job losses escalating
Our Focus: Supporting the Market • Increasing use of foreclosure prevention tactics • Expanded servicer flexibility and tools • Active issuer of MBS and debt • $631 billion of new business acquisitions in 2008, and largest issuer of mortgage-related securities • Helping to keep mortgage rates down – a result of Treasury and Federal Reserve support for GSEs
Our Focus: Making Home Affordable • Making Home Affordable program is part of Administration’s Homeowner Affordability and Stability Program • Provides expanded access to refinancing for borrowers whose homes have fallen in value • Provides $75 billion to support the modification of at-risk mortgages • Treasury increasing funding commitment to GSEs to $200 billion each • Treasury will continue to purchase GSE MBS • Work with GSEs to support state and local housing agencies The Making Home Affordable logo is a trademark of the United States Department of the Treasury and is used under license.
Refi Plus™ for Fannie Mae-to- Fannie Mae Refinances Goal: Provide refinancing opportunities for responsible homeowners to make their Fannie Mae mortgages more affordable Fannie Mae’s Home Affordable Refinance Solution: Refi PlusTM Announcement 09-04: Home Affordable Refinance – New Refinance Options for Existing Fannie Mae Loans (March 4, 2009)
Refi Plus Highlights • Borrowers must have an existing Fannie Mae loan with an acceptable payment history • Borrowers must benefit from the refinance: • Reduced monthly payment OR • Move to a more stable product (e.g., ARM to FRM) • Up to 105% LTV • MI flexibilities, with no additional coverage required • Limited cash-out refinances only • No minimum credit score • New loan may be underwritten manually or with Desktop Underwriter® (DU®)
Refi Plus™ DU Refi Plus™ Desktop Underwriter® solution • Any lender using DU (or originator using Desktop Originator®) • Retail, wholesale, and correspondent channels • DU updates • Weekend of April 4 • Weekend of May 2 Manual underwriting solution • Lender must be current servicer • Retail channel only • Available immediately Refi Plus Options Deliveries: On or after April 1, 2009 Details: Announcement 09-04 and DU Release Notes for April and May Updates
Home Affordable Modification Highlights • Borrowers in default, at risk of imminent default, or in foreclosure can have loans modified to a more affordable monthly payment equal to 31 percent of monthly gross income. • Servicers may reduce interest rates, lengthen repayment period, or forbear principle to bring down payment. • Government shares in modification cost of non-GSE loans. • All servicers must participate for eligible Fannie Mae portfolio and MBS pool mortgages. • They may elect to participate for non-GSE loans. • Home Affordable Modification replaces Streamlined Modification and Early Workout™ programs.
Additional Foreclosure Prevention Tools • HomeSaver Forbearance • Six month plan available to borrowers that are either in default or for whom default is imminent and who do not qualify for the modification program • Fannie Mae Workout Hierarchy • New workout hierarchy supersedes the previously announced “RAMPD” hierarchy introduced in Announcement 08-14: Introduction of the HomeSaver Advance™
Tools for Borrowers For general information on the Making Home Affordable Program, visit www.MakingHomeAffordable.gov Borrower-friendly information, including a loan look-up tool, is available on www.fanniemae.com Resource Center hotline: 1-800-7FANNIE Borrowers who can’t reach a foreclosure prevention solution with their servicer should be encouraged to talk with a HUD-approved housing counselor. • Call 1-888-995-HOPE • Or locate a local counselor at www.hud.gov
Partners in Making Home Affordable Servicer resources are strained, so Fannie Mae is here to help. We have hotlines to answer servicer questions, and training tools, talking points and FAQs available on eFannieMae.com
Promoting Sustainable Home-owning Fannie Mae’s underwriting criteria support home-owning, not just home-buying: • Equity / “skin in the game” • Sound underwriting standards • Fewer risk layers • Quality control is more important than ever Goal: Provide buyers with the best loan for the long term
New 2009 Temporary Loan Limits Temporary increase in conforming loan limits for high-cost areas. Effective May 1, 2009. Authorized by the American Recovery and Reinvestment Act (ARRA) Loans originated in 2009 can use the higher of: • Current permanent high-cost loan limits; or • Temporary loan limits in place in 2008 for jumbo-conforming loans Visit eFannieMae.com for the announcement and matrix
Keeping Up with Policy and Product Updates Complete, up-to-date information on Fannie Mae pricing, underwriting policies, Desktop Underwriter® (DU®), and products is always available: • On the “Single-Family Business” index page on eFannieMae.com www.efanniemae.com/sf/ • In the “What’s New Matrix” • Downloadable PDF • Updated frequently • Live and recorded trainings • Your Fannie Mae Customer Account Team
Our Pledge Fannie Mae has a mandate to help in the recovery of the housing and mortgage market crisis. We are focused on serving our customers and industry partners, and realize there is much more to do. We pledge to . . . • Be as flexible and responsible as possible • Be open to your ideas and criticisms • Do what is necessary to serve the market • Focus on serving you — our customers and industry partners • Listen to all ideas for keeping people in their homes