Find foreclosure properties among government-owned homes, which have been rising in number over the past two years.
Fannie Mae foreclosures, for instance, are now being offered with closing cost assistance of up to 3.5 percent of the purchase price to hasten the reduction of record numbers of Fannie-owned homes.
According to Fannie Mae credit management vice president Terry Edwards, any additional help to the federal home buying tax incentive will increase further the number of families buying homes and will help reduce the number of vacant homes in neighborhoods.
The closing cost assistance, which can also be used to buy appliances, will be available to qualified home buyers before May 1 this year. Prospective buyers can visit HomePath.com for further instructions.
Last year, Fannie Mae repossessed 98,428 homes from January to September and sold nearly 90,000 units during the same nine-month period. But as of October 1, it still had more than 72,000 homes on its repossessed books, marking a seven-percent jump from its listings in October 2008.
In November, the number of Fannie Mae single-family mortgages in default rose to 5.3 percent, a substantial rise from the November 2008 rate of 2.1 percent.
Prospective home buyers can also find foreclosure properties among HUD homes. The number of HUD properties has also been rising sharply as defaults in mortgage loans guaranteed by the Federal Housing Administration continued to grow. According to mortgage researchers, the default rate in mortgages insured in 2007 and in 2008 by the FHA has risen to 24 percent. Additionally, the percentage of mortgage borrowers who defaulted on their FHA loans after just one monthly payment has increased.
More than 12 percent of all FHA-backed home loans made by about 30 major lenders went into default just two years after their origination.
Freddie Mac, meanwhile, has been striving to reduce the number of Freddie Mac foreclosures. It has launched Borrower Help Centers in Phoenix, Chicago, Washington, D.C. and San Bernardino to help discouraged Freddie Mac borrowers to continue pursuing loan modifications despite initial setbacks.
Last year, Freddie Mac was able to help almost 250,000 borrowers save their homes through various repayment plans. Freddie-backed home loans account for about 23 percent of all residential mortgage loans in the U.S., nine percent of which are already in default by three months or more.
Other government-owned homes that can be explored by buyers wanting to find foreclosure properties are those repossessed by the Departments of Agriculture, Veterans Affairs, Internal Revenue Service and Army Corps of Engineers.