Mortgage and Appraisal Industry VIP's - HUD, FHA, FNMA, GNMA, and FHLMC This page includes the “About Us” and other information from the following web sites. Visit their web sites for more information. I’ve included this so that you have a basic idea of what each of these organizations does. They are all VIP’s - very important players, in the real estate, mortgage loan, and appraisal businesses!! These are the people who determine the guidelines for filling out the standard real estate appraisal and mortgage loan forms. They also determine what updates or changes are made to the forms. > U.S. Department of Housing and Urban Development (HUD) - www.hud.gov
>> HUD's mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. To fulfill this mission, HUD will embrace high standards of ethics, management and accountability and forge new partnerships - particularly with faith-based and community organizations - that leverage resources and improve HUD's ability to be effective on the community level. > Federal Housing Administration (FHA) - http://www.hud.gov/offices/hsg/fhahistory.cfm
>> What is the Federal Housing Administration? The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring nearly 33 million properties since its inception in 1934.
>> What is FHA Mortgage Insurance? FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default. Loans must meet certain requirements established by FHA to qualify for insurance.
>> Why does FHA Mortgage Insurance exist? Unlike conventional loans that adhere to strict underwriting guidelines, FHA-insured loans require very little cash investment to close a loan. There is more flexibility in calculating household income and payment ratios. The cost of the mortgage insurance is passed along to the homeowner and typically is included in the monthly payment. In most cases, the insurance cost to the homeowner will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property -whichever is longer.
>> How is FHA funded? FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely. FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue.
>> The History of FHA: Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965. When the FHA was created, the housing industry was flat on its back: - Two million construction workers had lost their jobs. - Terms were difficult to meet for homebuyers seeking mortgages. - Mortgage loan terms were limited to 50 percent of the property's market value, with a repayment schedule spread over three to five years and ending with a balloon payment. - America was primarily a nation of renters. Only four in 10 households owned homes.
>> During the 1940s, FHA programs helped finance military housing and homes for returning veterans and their families after the war. In the 1950s, 1960s and 1970s, the FHA helped to spark the production of millions of units of privately-owned apartments for elderly, handicapped and lower income Americans. When soaring inflation and energy costs threatened the survival of thousands of private apartment buildings in the 1970s, FHA's emergency financing kept cash-strapped properties afloat. The FHA moved in to steady falling home prices and made it possible for potential homebuyers to get the financing they needed when recession prompted private mortgage insurers to pull out of oil producing states in the 1980s.
>> By 2001, the nation's homeownership rate had soared to an all time high of 68.1 percent as of the third quarter that year. The FHA and HUD have insured almost 30 million home mortgages and 38,000 multifamily project mortgages representing 4.1 million apartments, since 1934. In the more than 60 years since the FHA was created, much has changed and Americans are now arguably the best housed people in the world. HUD has helped greatly with that success. > Federal National Mortgage Association (Fannie Mae) or (FNMA) - www.fanniemae.com
>> For most of us, a home is more than simple shelter or a good investment. A home of our own is a dream come true and symbolizes who we are. At Fannie Mae, the home symbolizes who we are, too. Our public mission, and our defining goal, is to help more families achieve the American Dream of homeownership.
>> We do that by providing financial products and services that make it possible for low-, moderate-, and middle-income families to buy homes of their own. Since Fannie Mae began in 1968 we have helped more than 61 million families achieve the American Dream of homeownership.
>> We are proud of what we have accomplished. More Americans own homes today than at any time in history. As the leader of the housing finance system, Fannie Mae is working to expand homeownership opportunities by creating products and technologies that help more people own homes. We believe that by doing so, we make a positive contribution to families, communities, and the nation > Government National Mortgage Association (Ginnie Mae) or (GNMA) - www.ginniemae.gov
>> Who we are. What we do. Why it makes a difference? At Ginnie Mae, we help make affordable housing a reality for millions of low- and moderate-income households across America by channeling global capital into the nation's housing markets. Specifically, the Ginnie Mae guaranty allows mortgage lenders to obtain a better price for their mortgage loans in the secondary market. The lenders can then use the proceeds to make new mortgage loans available.
>> Ginnie Mae does not buy or sell loans or issue mortgage-backed securities (MBS). Therefore, Ginnie Mae's balance sheet doesn't use derivatives to hedge or carry long term debt. What Ginnie Mae does is guarantee investors the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans — mainly loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Other guarantors or issuers of loans eligible as collateral for Ginnie Mae MBS include the Department of Agriculture's Rural Housing Service (RHS) and the Department of Housing and Urban Development's Office of Public and Indian Housing (PIH).
Ginnie Mae securities are the only MBS to carry the full faith and credit guaranty of the United States government, which means that even in difficult times an investment in Ginnie Mae MBS is one of the safest an investor can make.
>> What Are Mortgage-Backed Securities? Mortgage-backed securities (MBS) are pools of mortgages used as collateral for the issuance of securities in the secondary market. MBS are commonly referred to as "pass-through" certificates because the principal and interest of the underlying loans is "passed through" to investors. The interest rate of the security is lower than the interest rate of the underlying loan to allow for payment of servicing and guaranty fees. Ginnie Mae MBS are fully modified pass-through securities guaranteed by the full faith and credit of the United States government. Regardless of whether the mortgage payment is made, investors in Ginnie Mae MBS will receive full and timely payment of principal as well as interest.
>> Ginnie Mae MBS are created when eligible mortgage loans (those insured or guaranteed by FHA, the VA, RHS or PIH) are pooled by approved issuers and securitized. Ginnie Mae MBS investors receive a pro rata share of the resulting cash flows (again, net of servicing and guaranty fees).
>> Ginnie Mae I MBS requires all mortgages in a pool to be the same type (e.g. single-family) and have a first payment date no more than 48 months before the issue date of the securities. Each mortgage must be, and must remain, insured or guaranteed by FHA, VA, RHS or PIH. In addition, the mortgage interest rates must all be the same and the mortgages must be issued by the same issuer. The minimum pool size is $1 million; payments on Ginnie Mae I MBS have a stated 14-day delay (payment is made on the 15th day of each month).
>> Ginnie Mae II MBS allows multiple-issuer pools to be assembled, which in turn allows for larger and more geographically dispersed pools as well as the securitization of smaller portfolios. A wider range of coupons is permitted in a Ginnie Mae II MBS pool, and issuers are permitted to take greater servicing fees — ranging from 25 to 75 basis points. The minimum pool size is $250,000 for multi-lender pools and $1 million for single-lender pools. Ginnie Mae II MBS have an additional five-day payment delay because issuer payments are consolidated by a central paying agent (payment is made on the 20th day of each month).
>> Real Estate Mortgage Investment Conduits (REMICs) direct principal and interest payments from underlying mortgage-backed securities to classes with different principal balances, interest rates, average lives, prepayment characteristics and final maturities. Unlike traditional pass-throughs, the principal and interest payments in REMICs are not passed through to investors pro rata; instead, they are divided into varying payment streams to create classes with different expected maturities, different levels of seniority or subordination or other differing characteristics. The assets underlying REMIC securities can be either other MBS or whole mortgage loans. REMICs allow issuers to create securities with short, intermediate and long-term maturities — flexibility that allows issuers to expand the MBS market to fit the needs of a variety of investors.
Ginnie Mae Platinum Securities provide investors with greater operating efficiency, allowing holders of multiple MBS to combine them into a single platinum certificate. Ginnie Mae Platinum Securities can be used in structured finance transactions, repurchased transactions as well as general trading. > Federal Home Loan Mortgage Corporation (Freddie Mac) or (FHLMC) - www.freddiemac.com
>> Freddie Mac is a stockholder-owned corporation chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage pass through securities and debt instruments in the capital markets. By doing so, we ultimately help homeowners and renters get lower housing costs and better access to home financing.
>> Our Mission: Since the Great Depression, federal support for housing has been an enduring national public policy objective. In the late 1960s the mortgage market was unpredictable, interest rates varied widely from city to city across the country, and mortgages loans were sometimes hard to get. Neither government nor private banking interests could address the nation's housing finance needs alone. A new solution was needed. Congress created Freddie Mac's charter in 1970, with a clear mission for us: stabilize the nation's mortgage markets and expand opportunities for homeownership and affordable rental housing. Freddie Mac's Congressional charter lays the foundation of our business and the ideals that power our mission. The charter forms the framework for our business lines, shapes the products we bring to market and drives the services we provide to the nation's housing and mortgage industry.
>> Our Business: Over the past 33 years, we have accomplished a great deal. As a participant in the secondary market for mortgage loans, we purchase mortgages from lenders across the country and package them into securities that can be sold to investors around the world. That's how we ensure that there is a continuous flow of funds to mortgage lenders and provide low- to middle-income homeowners and renters with lower housing costs and better access to home financing. But not all the loans we purchase are packaged into securities; we retain some in our own portfolio. We get the funds to do this by selling bonds to investors throughout the world. By offering investors a way to invest in mortgages on homes within the United States, we increase our ability to purchase mortgages from lenders and maintain a continuous flow of mortgage loan funds that in turn provide families with even more affordable mortgage financing. America's housing finance system is the envy of the world today. The combination of a Congressional charter and private-market discipline has allowed us to bring increased efficiency, strength and affordability to the market in all economic conditions.
>> Our Contributions: We take our mission very seriously at Freddie Mac, and we know the difference we have made. Over the last 33 years, we have: - helped increase the homeownership rate in America to record levels by purchasing more than 35 million mortgages, - lowered mortgage rates, which reduces homeowners' interest payments and apartment rents, - helped make home mortgage credit readily available and eliminated regional disparities, - helped expand the variety of mortgage loan products available, - used technology to help cut down the time and cost of getting a mortgage loan, - and attracted investors from here and abroad to support America's mortgage lending needs.
>> Consumers' lives are better because we've helped them become homeowners and renters of affordable, quality housing. Thanks to our contributions, homeownership in America has reached 68% today, and we're continuously working to increase that number. The goal is simple: to open more doors for more people than ever before. |
