I am not doing the 3.6 FORM deal

[alebrewer]

J - Justin was being a bit coy, I think. F/F don't buy the defaulted loans back (they're already holding them) - they issue repurchase demands for the lenders to by the loans back...

 

[J Grant]

J - Justin was being a bit coy, I think. F/F don't buy the defaulted loans back (they're already holding them) - they issue repurchase demands for the lenders to by the loans back...

Fannie does not issue repurchase demands for the lender to buy the loans back for a WAIVER/value acceptance! Read their website about the program - Fannie (and Freddie one assumes) offers relief of reps and warranties ( relief from a repurchase to the lender on a Waiver or value acceptance loan )


Fannie is already holding the loans??? Most of the loans are sold to investors - how could Fannie afford to hold all their loans?.

Justin gave his answer -Fannie itself does not buy defaulted loans ( repurchase ). In response to my question, do they buy a loan back due to collateral value issues in the value acceptance program?

With a value acceptance, since the lender is relieved of the obligation to repurchase and Fannie does not repurchase, then the losses would be absorbed by the taxpayers. Who else is left?

 

[djd09]

For loans with appraisals too, or just loans with Value Acceptance?

qe forever...

 

[J Grant]

Lenders have a buy-back/repurchase obligation with loans done using appraisals.

How can people not know this stuff? It is on Fannie/freddie sites or look it up in AI with one click.

 

[djd09]

wait what...the banksters got bailouts too

 

[alebrewer]

Fannie does not issue repurchase demands for the lender to buy the loans back for a WAIVER/value acceptance! Read their website about the program - Fannie (and Freddie one assumes) offers relief of reps and warranties ( relief from a repurchase to the lender on a Waiver or value acceptance loan )


Fannie is already holding the loans??? Most of the loans are sold to investors - how could Fannie afford to hold all their loans?.

Justin gave his answer -Fannie itself does not buy defaulted loans ( repurchase ). In response to my question, do they buy a loan back due to collateral value issues in the value acceptance program?

With a value acceptance, since the lender is relieved of the obligation to repurchase and Fannie does not repurchase, then the losses would be absorbed by the taxpayers. Who else is left?

I didn't know that F/F sold loans to investors. I had thought that the way they maintain liquidity is by pooling loans and selling MBS. Shows you how much I know. Thank you for that in depth analysis, J.

 

[J Grant]

I didn't know that F/F sold loans to investors. I had thought that the way they maintain liquidity is by pooling loans and selling MBS. Shows you how much I know. Thank you for that in depth analysis, J.

Pooling loans and selling them is still selling loans. Thanks for your input -

 

[alebrewer]

Pooling loans and selling them is still selling loans. Thanks for your input -

You really don't understand the process do you, J? They aren't 'selling' the loans - they are still held by the GSE's (or Ginnie Mae, depending on what type of loan it is). The 'investors' (as you call them) own securities representative of the claims on the principal and interest from the pools. So no, most of the loans aren't 'sold off to investors'?

How can folks not know this stuff?...

 

[J Grant]

AI Overview



No, investors do not own individual loans they buy from
Fannie Mae in the traditional sense; they buy mortgage-backed securities (MBS), which are bundles of mortgages that Fannie Mae creates. Investors buy a share in the MBS, giving them a claim on the payments from the underlying pool of loans, but they do not have ownership of any specific loan.

How it works

• Fannie Mae buys loans: Fannie Mae purchases conforming mortgages from lenders, freeing up the lenders' capital to make new loans.
• Loans are bundled: Fannie Mae bundles these purchased loans into securities called mortgage-backed securities (MBS).
• Investors buy the securities: Fannie Mae then sells these MBS to investors.
• Investors receive payments: Investors receive payments from the pool of mortgages represented by the MBS they own, but they do not own the individual loans themselves.

 

[alebrewer]

Fannie is already holding the loans??? Most of the loans are sold to investors - how could Fannie afford to hold all their loans?.

Right - so now you're getting close to being able to answer this question (that you posed a few posts earlier).

As to the repurchase liability lenders have. Based on Justin's response to one of my posts, if VA/ACE is offered without inspection requirement, lenders have no exposure to the collateral piece of the buyback liability. If the lender/borrower, however, is offered VA/ACE PLUS PDC/PDR, then the lender IS still responsible for the subject's property condition (and repurchase demands could be presented based on GSE determination of lender misrepresentation of the property condition) - but not the value.

Hope that helps.