Fannie Mae Announcement Turns Out To Be A Clever Hoax

UPDATE: As of this morning we've confirmed that the HomeRight program isn't real. The press release, and the contact claiming to be Andrew Wilson, were part of a hoax. I will say the language was extremely well written.
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UPDATE: Just got word from Fannie Mae media relations executive Andrew Wilson. He claims that the HomeRight program isn't real and that the release is a fake. There is some confusion because we spoke with someone claiming to be Mr. Wilson earlier today and he confirmed that HomeRight was real and went in depth as to how the program would be implemented. Frankly the program seemed very exciting as it addressed many of the issues we're concerned about, namely:

Principle reduction for underwater home owners
Addressing the huge number of abandoned houses in Atlanta
Stopping the bulk sale of foreclosed homes to investors at reduced prices.

We've asked Mr. Wilson if he would provide clarity to our confusion and expect to hear back from him very soon. For now, we're assuming HomeRight is to good to be true.
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We just got word that Fannie Mae is stating a new three point program call HomeRight, which addresses many of the issues we've been concerned about. Today, we find ourselves in deep gratitude to Fannie Mae for doing the right thing! A fairly rare occurrence these days!

September 13, 2012

Fannie Mae Launches New HomeRight Community Relief Program

New Guidelines Streamline Housing Market Recovery and Relief to Borrowers

Andrew Wilson

678.458.3031

WASHINGTON, DC – Today, Fannie Mae (FNMA/OTC) announced that it will launch HomeRight, a three point community relief program designed to help more homeowners avoid foreclosure and improve community and housing market stability. As the weak housing market continues to be a burden on overall economic recovery, this new program will address the factors inhibiting market stabilization, such as negative equity held by many homeowners and the large quantity of vacant and REO properties held in Fannie Mae and other lenders' portfolios.

Through participation in the Home Affordable Modification Program - Principal Reduction Alternatives (HAMP - PRA), as well as Fannie Mae's new pilot program HomeRight, servicers will be required to write down mortgages owned by Fannie Mae to reflect their current market value. As recent Fitch Ratings analysis shows, using principal reduction (PR) to reduce loan-to-value ratio (LTV) increases the borrowers' ability to pay, and the re-default rate is significantly lower for loans modified with principal reduction, compared with loans modified only with payment reduction options. Principal reduction will also help create more demand in the housing market, as having equity in the home allows for young families to trade up to bigger places, and for empty nesters to downsize more easily.

HomeRight will also address the growing backlog of REO properties by implementing new initiatives designed to reduce the number of vacant homes on the market, balance the decline in home values, and provide stability to displaced homeowners affected by foreclosure. Homeowners who were foreclosed on between 2007-2011 will have the option to buy back their former home -- or, if unavailable, a comparable home in the same neighborhood -- at its current market value. Lease options will also be implemented for those unwilling or unable to explore homeownership. These lease options will also be extended to current homeowners facing foreclosure who wish to remain in their home, but can no longer afford to own. A new help desk and call center will be created to help administer this new program and ensure its efficiency.

Finally, through the HomeRight program, Fannie Mae is working with non-profit and community organizations dedicated to providing affordable housing to the growing number of displaced families facing homelessness. These organizations will be provided grants to be used in the rehabilitation of homes in distressed markets, which once completed will be turned over to those communities to provide long term affordable housing options.

These new initiatives will continue Fannie Mae's goals of fostering a liquid, efficient, competitive, and resilient national housing finance market, while protecting the American dream of homeownership and stable housing options for all.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

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