Plagued by a record number of foreclosures, one of the nation’s giant mortgage lenders is offering to pay closing costs for home buyers in an effort to speed up home sales and get them off the troubled mortgage lender's books.
Fearing political fallout, the government lender won’t help millions of Americans losing their homes to foreclosure, but Fannie Mae is now paying real estate agents and brokers extra bonuses to sell its foreclosure inventory.
Qualified home buyers who intend to live in the properties can get as much as 3.5% to go towards closing cost assistance. Real estate agents representing purchasers will receive a $1,500 bonus at closing. To be eligible for the credit, buyers must submit their offer after Sept. 23 rd and the transaction must close no later than Dec. 31, 2010 or within 60 days of being accepted, which ever is first.
The program was announced by the government lender after lawmakers’ exerted pressure on the Housing and Urban Development Department urging Fannie Mae and Freddie Mac to speed up the housing recovery. Foreclosures are at all-time record levels with more than 1.3-million homes expected to be foreclosed in 2010 alone.
Fannie Mae REO homes are handled by the agency’s Home Path program. "More than eighty-seven thousand families have purchased Home Path properties in the first half of 2010, nearly double the number of Fannie Mae foreclosed properties sold in the first half of 2009," said Terry Edwards of Fannie Mae's Credit Portfolio Management. "We continue to look for ways to stabilize neighborhoods and offer incentives to qualified buyers who will occupy these properties over the long-term and help support their communities."
The volume of properties Home Path has sold so far is a small percentage of the troubled lender’s massive inventory of foreclosures. Freddie Mac and Fannie Mae hold more than 1-million homes in their bloated inventory of REO properties.
The homes and other properties Fannie Mae formally repossesses and sells include single family homes, condominiums and townhouses. The properties are also eligible for special government financing programs for owner occupants, including special low interest rates to help with remodeling.