Was my loan funded by Fannie, Freddie or neither?


Posted: 02 Aug 2010 09:38 AM PDT

I have likely sent more than 200 files this year alone to Karen in my office with a sticky note that says, “Fannie / Freddie?” She will send it back to me, most of the time circling one of them, or writing “neither” right below.

Everyone who owns a TV or radio recognizes by now these names as mortgage lenders. Most also associate them closely with what went wrong the past few years. Did they lend too liberally? Most agree that they did. Do they still? The jury’s out on that one. Who made them do it? Well, let’s not talk politics. Did they act alone? Not a chance.

That being said, most people are unaware that their own mortgage was likely funded by one of them.

When I ask a client if theirs is a Freddie or Fannie backed loan, the most common response I get is “I don’t think so.” And yet, in the past decade over half of all loans and most fixed rate loans (over 90%) were funded by one of those two giant lenders.

So how is it that I don’t know who lent me the money? Here’s why: The lender you send your payments to is simply servicing the loan for Fannie or Freddie. It collects payments, works out tough situations, and arranges the payoffs when that time comes. Fannie or Freddie lent the money behind the scenes and earns the return or takes the loss net of the servicing fees of the bank. It’s a good system. Each organization specializes in what it does best. At least that’s how it’s designed. Losses are reserved for those who take the risk and have the potential to reap the reward.

So the odds are pretty good that your loan is backed by Freddie or Fannie. And that’s okay. It doesn’t make you a bad person if it is. It’s just a fact—and, as it turns out, one that may be of some benefit to you now.

Here’s the point: If your loan was funded by Fannie Mae or Freddie Mac there may be refinance options available to you that otherwise would not exist, and if you are paying on time, you will likely be eligible for them.

You can check your loan here:

Does Fannie Mae Own Your Mortgage? Loan Lookup Tool

Avoiding Foreclosure – Does Freddie Mac Own Your Mortgage?

(If you don’t find yours here, call your lender. And be sure that they’re sure—sometimes legitimate matches don’t show up)

Contact The Mortgage Mark with any questions!   http://www.themortgagemark.com/ 
 
mwilkins@capitalfmc.com