McLEAN, Va. (AP) — Mortgage finance company Freddie Mac said Friday it will need an additional $30 billion to $35 billion in government aid as it copes with losses on loans the company backed during the U.S. housing bubble.
The company disclosed in a Securities and Exchange Commission filing late Friday that it expects its government regulator, the Federal Housing Finance Agency, to make the request from the Treasury Department.
It comes on top of the $13.8 billion the company received last year after it was seized by the government. Sibling company Fannie Mae has yet to request any such aid but has warned it may need to do so.
Federal regulators seized control of both companies in September after they faced mounting losses from the housing market's bust. An agreement with the Treasury Department allows the government to invest up to $100 billion in each company.
The actual amount of the request will reflect the amount of losses the company sustained in the fourth quarter, Freddie Mac said in the filing.
The request suggests that losses are continuing for Freddie Mac, which posted a loss of $25.3 billion for the third quarter. In that report, Freddie Mac said that rising unemployment rates, tightening credit and deteriorating economic conditions caused the number of delinquent loans to rise, including prime loans made to borrowers with strong credit.
Meanwhile, Freddie Mac also disclosed that it settled a dispute with JP Morgan Chase & Co., which will now collect payments on mortgages previously handled by failed thrift Washington Mutual. The agreement settles a dispute with JPMorgan, which purchased Washington Mutual in late September for $1.9 billion.
Keep Your Home. Know Your Loan.” campaign promotes free housing counseling
HUD KICKS OFF SIX-CITY FINANCIAL LITERACY CAMPAIGN TO HELP TROUBLED HOMEOWNERS AVOID FORECLOSURE AND RESCUE SCAMS
NEW YORK - U.S. Housing and Urban Development Secretary today announced HUD's latest effort to prevent foreclosure by launching an aggressive consumer education campaign in six cities. HUD's "Keep Your Home. Know Your Loan." campaign will kick off in Chicago, Detroit, Los Angeles, Miami, New York and Phoenix. Preston launched the public awareness initiative at Neighborhood Housing Services, a New York City agency that offers clients free mortgage delinquency and default resolution counseling.
HUD's financial literacy campaign builds on the Department's continuing commitment to support its 2,600 housing counseling agencies across the country. In 2008, demand for HUD-approved counseling increased significantly. Meanwhile, the number of foreclosure rescue scams has also increased in response to the nation's housing crisis.
"This campaign is a call to action for families at risk of losing their homes," said Preston. "We want people to pick up the phone and call a HUD-approved housing counseling agency before they reach a point of no return.
Keeping your home may be as easy as dialing
(877) HUD-1515."
Many troubled homeowners seek help late in their financial crisis thereby limiting their loan modification options. HUD's campaign will target homeowners who are three-to-six months from defaulting on their mortgage, facing a reset on their adjustable-rate mortgage, or are experiencing a family crisis such as unemployment or skyrocketing health care costs in 2009.
The "Keep Your Home. Know Your Loan." campaign will include print, radio and television public service announcements, as well as a tool kit for non-profit counseling agencies that will support the effort. In each PSA, consumers are directed to call HUD's toll-free counseling hotline (877-HUD-1515) to arrange free face-to-face meetings with a counselor near them. Since most HUD-approved counseling agencies lack the resources for marketing and outreach, the Department is launching this campaign to help consumers earlier in their financial crisis and to fight the explosion of "pay-to-play" loan modification scams.
HUD's support for housing counseling agencies has grown significantly, from $20 million in 2001 to $50 million in 2008. In addition, federal support has now grown exponentially with $360 million in additional funds in 2008 specifically for foreclosure prevention counseling. HUD has requested another $65 million to support local housing counseling agencies in FY 2009.
Research finds HUD-approved housing counseling is effective to prevent foreclosure. A recent HUD study noted a 55 percent increase in the number of clients receiving foreclosure prevention counseling between 2006 and 2007. Of the approximately 136,000 families that completed this counseling during 2007, 45 percent were able to remain in their homes while 14 percent ultimately lost their home through foreclosure. This report also found that in the years leading up to the current crisis, more than 55 percent of low-income families seeking to buy their first home did not seek out pre-purchase counseling. This lack of counseling likely left them unprepared to make one of the biggest financial commitments of their lives and may have contributed to some of today's high rates of default and foreclosure.
Challenge: In light of the economic conditions, including declining home values and the increase of resetting mortgage rates, many Americans are facing significant challenges that are contributing to the alarming rate of foreclosures. HUD-approved Housing Counseling Agencies can help homeowners navigate their financial challenges. However, counselors have more options to assist clients when homeowners call early in the process before they are in crisis.
Response: Over the next 6 months, the U.S. Department of Housing and Urban Development is launching a national consumer education campaign urging homeowners to seek free, HUD-approved housing counseling advice. The campaign is a call to action for homeowners and target communities and demographic groups that are most at-risk.
Campaign goal: Provide marketing and outreach materials and technical support to assist housing counseling and non-profit agencies that provide services to homeowners. The hope is to target current homeowners to assist them in keeping their homes by:
Informing them of their loan terms and associated financial options;
Encouraging them to seek assistance early – call to action; and
Educating consumers on how to improve general financial literacy.
Components: The campaign provides a 'tool kit' which includes print, radio and TV PSAs, to support community, non-profit agencies that provide housing counseling services.
Partners: HUD is urging community, cultural, faith-based and political advocates to become involved in the campaign. In addition, HUD is seeking homeowner associations, real estate brokers and other members of industry to take an active role.
Target cities: Six cities were chosen for the launching of the campaign which are New York, Miami, Chicago, Detroit, Los Angeles, and Phoenix.
Campaign brand and hotline: Keep Your Home. Know Your Loan.
Call 1 (877) HUD-1515 for one of HUD's 2300 approved Housing Counseling Agencies in your local area. Visit http://www.hud.gov/keepyourhome.
NEW YORK - U.S. Housing and Urban Development Secretary today announced HUD's latest effort to prevent foreclosure by launching an aggressive consumer education campaign in six cities. HUD's "Keep Your Home. Know Your Loan." campaign will kick off in Chicago, Detroit, Los Angeles, Miami, New York and Phoenix. Preston launched the public awareness initiative at Neighborhood Housing Services, a New York City agency that offers clients free mortgage delinquency and default resolution counseling.
HUD's financial literacy campaign builds on the Department's continuing commitment to support its 2,600 housing counseling agencies across the country. In 2008, demand for HUD-approved counseling increased significantly. Meanwhile, the number of foreclosure rescue scams has also increased in response to the nation's housing crisis.
"This campaign is a call to action for families at risk of losing their homes," said Preston. "We want people to pick up the phone and call a HUD-approved housing counseling agency before they reach a point of no return.
Keeping your home may be as easy as dialing
(877) HUD-1515."
Many troubled homeowners seek help late in their financial crisis thereby limiting their loan modification options. HUD's campaign will target homeowners who are three-to-six months from defaulting on their mortgage, facing a reset on their adjustable-rate mortgage, or are experiencing a family crisis such as unemployment or skyrocketing health care costs in 2009.
The "Keep Your Home. Know Your Loan." campaign will include print, radio and television public service announcements, as well as a tool kit for non-profit counseling agencies that will support the effort. In each PSA, consumers are directed to call HUD's toll-free counseling hotline (877-HUD-1515) to arrange free face-to-face meetings with a counselor near them. Since most HUD-approved counseling agencies lack the resources for marketing and outreach, the Department is launching this campaign to help consumers earlier in their financial crisis and to fight the explosion of "pay-to-play" loan modification scams.
HUD's support for housing counseling agencies has grown significantly, from $20 million in 2001 to $50 million in 2008. In addition, federal support has now grown exponentially with $360 million in additional funds in 2008 specifically for foreclosure prevention counseling. HUD has requested another $65 million to support local housing counseling agencies in FY 2009.
Research finds HUD-approved housing counseling is effective to prevent foreclosure. A recent HUD study noted a 55 percent increase in the number of clients receiving foreclosure prevention counseling between 2006 and 2007. Of the approximately 136,000 families that completed this counseling during 2007, 45 percent were able to remain in their homes while 14 percent ultimately lost their home through foreclosure. This report also found that in the years leading up to the current crisis, more than 55 percent of low-income families seeking to buy their first home did not seek out pre-purchase counseling. This lack of counseling likely left them unprepared to make one of the biggest financial commitments of their lives and may have contributed to some of today's high rates of default and foreclosure.
Challenge: In light of the economic conditions, including declining home values and the increase of resetting mortgage rates, many Americans are facing significant challenges that are contributing to the alarming rate of foreclosures. HUD-approved Housing Counseling Agencies can help homeowners navigate their financial challenges. However, counselors have more options to assist clients when homeowners call early in the process before they are in crisis.
Response: Over the next 6 months, the U.S. Department of Housing and Urban Development is launching a national consumer education campaign urging homeowners to seek free, HUD-approved housing counseling advice. The campaign is a call to action for homeowners and target communities and demographic groups that are most at-risk.
Campaign goal: Provide marketing and outreach materials and technical support to assist housing counseling and non-profit agencies that provide services to homeowners. The hope is to target current homeowners to assist them in keeping their homes by:
Informing them of their loan terms and associated financial options;
Encouraging them to seek assistance early – call to action; and
Educating consumers on how to improve general financial literacy.
Components: The campaign provides a 'tool kit' which includes print, radio and TV PSAs, to support community, non-profit agencies that provide housing counseling services.
Partners: HUD is urging community, cultural, faith-based and political advocates to become involved in the campaign. In addition, HUD is seeking homeowner associations, real estate brokers and other members of industry to take an active role.
Target cities: Six cities were chosen for the launching of the campaign which are New York, Miami, Chicago, Detroit, Los Angeles, and Phoenix.
Campaign brand and hotline: Keep Your Home. Know Your Loan.
Call 1 (877) HUD-1515 for one of HUD's 2300 approved Housing Counseling Agencies in your local area. Visit http://www.hud.gov/keepyourhome.
Fannie Mae Announces National REO Rental Policy
Renters in Fannie Mae-Owned Foreclosed Properties
Eligible to Stay in Their Homes
WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced the establishment of a new National Real Estate Owned (REO) Rental Policy that will allow qualified renters in Fannie Mae-owned foreclosed properties to stay in their homes. The company currently has an eviction suspension in place through the end of January which will allow for the new policy to be fully operationalized prior to the suspension concluding.
"Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing," said Michael Williams, chief operating officer of Fannie Mae. "This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates."
The new policy applies to renters occupying foreclosed properties at the time Fannie Mae acquires the property. Renters occupying any type of single-family property will be eligible including residents of two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing. Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property. The properties must meet state laws and local code requirements for a rental property.
While the company markets the properties for sale, Fannie Mae will manage the properties through a real estate broker or a property management company. The company will not require security deposits to be posted in connection with this program.
Renters in the foreclosed properties will be asked to pay market rate rent under the new leases. Rates may be determined by reviewing local comparable rents, conducting a neighborhood survey, or through other relevant indicators. Rates will also be subject to any legal rent control restrictions. The company will review each instance where the market rate may require a tenant to pay additional rent and will work to reach an equitable resolution.
On behalf of the company, property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options.
Eligible to Stay in Their Homes
WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced the establishment of a new National Real Estate Owned (REO) Rental Policy that will allow qualified renters in Fannie Mae-owned foreclosed properties to stay in their homes. The company currently has an eviction suspension in place through the end of January which will allow for the new policy to be fully operationalized prior to the suspension concluding.
"Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing," said Michael Williams, chief operating officer of Fannie Mae. "This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates."
The new policy applies to renters occupying foreclosed properties at the time Fannie Mae acquires the property. Renters occupying any type of single-family property will be eligible including residents of two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing. Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property. The properties must meet state laws and local code requirements for a rental property.
While the company markets the properties for sale, Fannie Mae will manage the properties through a real estate broker or a property management company. The company will not require security deposits to be posted in connection with this program.
Renters in the foreclosed properties will be asked to pay market rate rent under the new leases. Rates may be determined by reviewing local comparable rents, conducting a neighborhood survey, or through other relevant indicators. Rates will also be subject to any legal rent control restrictions. The company will review each instance where the market rate may require a tenant to pay additional rent and will work to reach an equitable resolution.
On behalf of the company, property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options.
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