Hennepin County Suing Fannie Mae & Freddie Mac for $10mil.

Fannie Mae
Fannie Mae (Photo credit: Matti Mattila)

Get Ready to Rummble!   (you need to read that in the old WWF voice.. has more of an impact..)

Minneapolis / St Paul Business Journal reports that Hennepin County is suing Fannie Mae & Freddie Mac for failing to pay deed transfer tax.

Hennepin County has filed a civil lawsuit against Fannie Mae and Freddie Mac, seeking more than $10 million, for allegedly shorting deed transfer tax payments to the state’s 87 counties, Hennepin County Attorney Mike Freeman said Friday.

Read Full Story from Mpls/St Paul Business Journal


At this point I am only speculating what actually happened here.  According to the article, Fannie Mae and Freddie Mac were “shorting” Deed Tax payments to the Counties upon “Acquiring” the properties.  So by that I would take that to mean that when they foreclosed on the property, they did not pay all or some of the State Deed Tax of .0033% in out lying Counties or .0034% in Hennepin County and Ramsey County.

So on a Home Price of $200,000, the Deed Tax would be $660 and that same Home in Hennepin or Ramsey County the Deed Tax would be  $680.

What would the value be upon the Foreclosure?  What the bank initially lent on the property, tax assessed value, or what is REALLY worth in today’s market?   Who would determine that?  Maybe that is the real battle here.

I will try to track this story as it progresses.  I have a feeling this will be loaded with “Fun & Laughs” as these 2 entities duke it out while the only parties who will end up paying will be struggling taxpayers regardless of the outcome.

You can’t make this stuff up…


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If Fannie or Freddie were a horse, we would have shot it…

I read this article earlier in the week with intentions of digging deeper into the mess of Fannie and Freddie.  It is Sunday evening now and I don’t have the energy to dig into this mess…

So I thought I would throw this out to you and see what your opinions are on this.  It is a well written article, about a topic that is very confusing and messy to say the least…   About all I can come up with is “if Fannie or Freddie were a horse, we would have shot it..”


Fannie, Freddie No Longer Have to Borrow from the U.S. to Pay the U.S.

The country’s two secondary mortgage market companies Fannie Mae and Freddie Mac will no longer have to borrow money from the U.S. Treasury to make their quarterly dividend payments to the federal government….

Read Full Article from NAR

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HARP 2.0 – MN Refinancing Options for underwater mortgages

The HARP program has been enhanced to help borrowers who’s value has dropped significantly. With the new harp loan borrowers have the ability to refinance without worrying about the value of there home. Take a look at some of the features of this program that will help borrowers take advantage of the low interest rates available today. Below are a few highlights for you to consider.

  • Borrowers must be current on there mortgage payment and the mortgage must be held by fannie or freddie
  • Appraisals are not required on most of the refinances saving you time and money
  • Most transactions require no income documentation
  •  LTV requirements are relaxed to allow borrowers to take advantage of the great rates even if there value is negative. Borrowers with 1st and 2nd mortgages are a great example of people who can now be helped
  • Occupancy – many borrowers have elected to rent there previous home and buy a new primary residence. The rental property can now be refinance with HARP 2.0, where it previously would not qualify



Determine whether your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac by visiting their respective Loan Lookup Tools.



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Get your mortgage before January 1 2012 to beat the new fees

The Payroll Tax Extension was funded by new fees on FHA, Fannie Mae, and Freddie Mac mortgages.  To avoid the new fees you will want to get your mortgage before January 1, 2012.  This was signed into law under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The plan is to stimulate the

My Mortgage Docs to be Reviewed by an Expert
Image by Casey Serin via Flickr

national economy by lowering taxes.

This does not apply to Existing Mortgages.


Quit Waiting for Rates to drop further, because Fees are going up…


My first reaction was, why are they putting more burden on the struggling housing market?  As I thought further about this, I am beginning to think this not such a bad thing.  I’ll try to explain my logic; these new fees are only on FHA, Fannie Mae, and Freddie Mac mortgages.  These new fees will likely put consumer demand onto private mortgages which I believe would help out the real estate market.  Or at least it will make the private mortgages a little more competitive.


How much are these new fees:


From The Mortgage Reports:


From Title IV of the bill’s final form, these costs will be recouped via the mortgage market. The section is titled “Mortgage Fees And Premiums“. In it, Congress instructs Fannie Mae and Freddie Mac, and the FHA to take following specific measures :

  • Fannie Mae and Freddie Mac : Increase loan guarantee fees by 10 basis points or more versus current levels, and do not decrease other costs to compensate
  • FHA : Increase mortgage insurance premiums by 10 basis points

The extra fees amount to roughly $10 per month per $100,000 borrowed.



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Fannie Mae requests another $7.8 Billion from Taxpayers to cover losses

Image by Getty Images via @daylife

Fannie Mae posted another $5.1 Billion loss in the 3Q  and is requesting another $7.8 Billion from the Treasury Department.   This brings the total Bailout to $112.6 Billion.  Their total required annual dividend payment to the Government is now up to $11.3 Billion which is more than Fannie Mae has ever earned in annual net revenue.

If you saw an earlier post of mine with the interview of Professor Karl Case, he had alluded to the potential risk to the housing market by Fannie Mae.  I felt like he wanted to come right out and say something but was kind of dancing around the direct point.  If you would like re-play that interview, click here. (clip 2:30 – 2:53) It would be interesting to sit down with Professor Karl Case in a one on one conversation off the record to hear what he really thinks.

To be honest, my eyes gloss over when I hear Billions and Trillions and sort of tune out.  It is hard for me to comprehend what a Billion is.  To put it in some perspective: If you sat down to count from one to one billion, you would be counting for 95 years.  Click Here for other perspectives on a Billion.  With that in mind, now take 95 years  x  112.6 = 10,697 years to count to every dollar Fannie Mae has needed in bailouts.

The market is making a slow recovery, but I am getting a little nervous on the potential risk of having one entity hold all the risk.  If I understood Professor Karl Case correctly by reading into what he did say, I think I am in agreement with him.

NEW YORK (CNNMoney) — Losses widened at mortgage giant Fannie Mae in the third quarter, forcing the government-controlled firm to request another $7.8 billion from the Treasury Department.

The company reported Tuesday a net loss of $5.1 billion, compared to a net loss of $2.9 billion in the second quarter. A year ago, Fannie Mae reported a net loss of $1.3 billion.

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Fannie Mae serious delinquencies lowest since 2009

The Colonial Revival headquarters of Fannie Ma...
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HousingWire reports good news from Fannie Mae.  The serious delinquency rate dropped to 4%, the lowest level since June 2009.  This is a promising sign.  If we can start seeing this trend continue we may be on our way to housing market recovery.

The serious delinquency rate on mortgages backed byFannie Mae dropped to 4%, the lowest level since June 2009.

The rate fell every month since the 5.59% peak in February 2009 except for July when it went unchanged. Fannie said the rate fell 3 basis points from August.

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