The goal of Fannie and Freddie was to create "affordable housing". Not only was that a big failure with housing reaching historically high prices, but now, their unofficial role is to prevent house prices from declining.
From the financial results press release:
Fannie Mae reported a net loss of $18.9 billion in the third quarter of 2009, compared with a loss of $14.8 billion in the second quarter of 2009. [...] As a result, on November 4, 2009, the Acting Director of the Federal Housing Finance Agency submitted a request for $15.0 billion from Treasury on the company’s behalf.From the Deed for Lease Program press release:
Total nonperforming loans in our guaranty book of business were $198.3 billion, compared with $171.0 billion on June 30, 2009, and $119.2 billion on December 31, 2008. The carrying value of our foreclosed properties was $7.3 billion, compared with $6.2 billion on June 30, 2009, and $6.6 billion on December 31, 2008.
Fannie Mae is implementing the Deed for Lease™ Program under which qualifying homeowners facing foreclosure will be able to remain in their homes by signing a lease in connection with the voluntary transfer of the property deed back to the lender.Yet again, the government sponsored agency is tapping into the savings of people who behaved rationally and didn't take part in this credit binge to reward those who didn't. Here, they are rewarding the least possible category of people : those who do not even qualify for any other loan-workout solutions, such as modifications.
The new program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification. Under Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate.
Also, old news, but still noteworthy:FHA Delays Fiscal Report