Survey Question

Is it morally wrong for underwater borrowers to renege on their mortgages and walk away from houses (and loans) they can still afford but are worth less than what they owe?

Most Popular Stories

These were the past week's most frequently emailed stories on our site:

1. Penny Mac Shifting From a Vulture Fund toward Being a Mortgage Conduit
2. A Once Hot Niche, Reverse Mortgages Face the Music
3. Hardly a Stampede to Walk Away from House and Mortgage
4. Seven Charged in Fraud Scheme Involving More Than 100 California Properties
5. FHA: Brokers No Longer Have to Register with Them

Quote of the Week

While we will not delay implementation of RESPA's new requirements, we are sensitive to the concerns of the industry as it integrates these new rules into their day-to-day business practices.

HUD Secretary Shaun Donovan on HUD's staff exercising restraint in taking enforcement actions against Federal Housing Administration-approved lenders during the first 120 days.

Reprints

If you would like professionally prepared reprints of articles or permission to re-publish an article or post an article on a Web site, please contact Denise Petratos at 212-803-6557.

Drawing Up a Fannie Mae/Freddie Mac Blueprint Will Be Complex

By Paul Muolo

Within the next 90 days the White House is expected to release its blueprint on what to do with the nation's money losing — but much needed — Congressionally chartered mortgage giants, Fannie Mae and Freddie Mac. If you think the answer to this dilemma is going to be an easy one then I have some AIG bonds I'd like to sell you.

First, let's state what might not seem so obvious: Fannie and Freddie are really giant savings and loan institutions. They hold liabilities and assets. Instead of using deposits they tap the capital money markets using short- and long-term debt. Most of their assets aren't whole loans, but mortgage-securities backed by residential whole loans.

Together, they have $1.6 trillion of on-balance sheet assets and off-balance sheet guarantees of $3.6 trillion for a total exposure of $5.2 trillion. And even though both operate under federal conservatorships (with Treasury pumping money into them to keep their net worth positions north of zero) Uncle Sam has yet — as a technical matter — to put his "full faith and credit" sticker on them.

Read more

• The page you are trying to visit is for subscribers of National Mortgage News print edition. Not a subscriber? Become one!
• Maybe you already have a password but you forgot it. Luckily, we wrote it down and we can remind you.
• Are you a subscriber to the National Mortgage News print edition but you don't have a username and password yet? Grab a copy of the paper (you're going to need your subscriber ID from your mailing label) and register here.
• Have you just become a subscriber but don't have your first copy of the paper yet? Thank you for your business. We've made arrangements for you.
• Not ready to make a commitment? How about a two-week free trial?
• Your browser must have cookies enabled.