Fannie Mae just reported the Q4 Earnings Report for 2020.
Fannie Mae just reported the Q4 Earnings Report for 2020. Celeste Mellet Brown, Fannie Mae’s Executive Vice President and Chief Financial Officer said that the risk of loans remaining in forbearance for a longer period of time may decrease the likelihood of a successful outcome.
According to Mellet Brown, if a single-family loan does not resolve and remains non-performing for a prolonged period of time or enters the flex modification then we (Fannie Mae) are required to repurchase it out of trust.
While the purchasers were 5.4 billion in 2020, it is anticipated that they can grow significantly in 2021. At year end, $108 billion of single family under-performing bonds was in forbearance, including $81 billion that was 90+ days delinquent. The current estimate is that approximately 30% of loans in forbearance may need to be repurchased.
Fannie Mae believes that the $5 billion in non-performing or unfixable forbore loans (foreclosures tomorrow) can and will turn into $30 billion, six times higher than the current rate.
If you are a homebuyer then the news means that there is more inventory right around the corner.
However, there is a problem for some homeowners. They may be forced to sell, end up with a short sale, or face foreclosure.
Thirteen years ago the real estate market faced a situation where foreclosures were an all to frequent reality. If your home is in the category described above it may be time to sell before a short sale or foreclosure is required. Check with your loan originator and see what options are available to you. You may then want to talk to a Realtor who understands the situation and can be of assistance.