South Jersey Congressman Rob Andrews says the Federal Housing Finance Agency is implementing pieces of a bipartisan plan he helped propose — to prevent foreclosures and spur growth in the housing market.
With today’s real estate market, many people are “under water,” owing more than their house is worth. Under new guidelines for loans backed by Fannie Mae and Freddie Mac, mortgage servicers must review and respond to sale requests within 30 days, and make a final decision within 60 days.
Andrews said many people who are trying to sell their homes don’t get a “yes” or a “no” — they get nothing.
“It has become a chronic problem in the U.S. home market that someone goes to sell their home and they’re in this underwater situation. They have $150,000 on a mortgage and a $120,000 offer,” Andrews said. “And they go to their lender and they say, ‘Hey, will you take this? Will you let me sell the house for this and release your lien on the house?’ And they wait and they wait and they wait and they wait, and they never get an answer.”
Andrews said it’s essential to get answers quickly before prospective buyers walk away.
“For many people, home equity has literally evaporated. And for many people, they’re in a situation where the mortgage on their home is actually greater than the value of the home,” Andrews said. “This is a national problem. We are very fortunate in New Jersey that it is less prevalent than some areas such as Southern California or Nevada, but it is a problem.”
Fannie Mae and Freddie Mac back about 90 percent of new mortgages. The government-controlled companies help provide money for the U.S. housing market by buying residential mortgages and packaging pools of those loans for sale to investors.