Using Freddie Mac Foreclosures to Find Bargains with Foreclosed Homes

Tap into FHMLC Foreclosures

FreddieMac foreclosuresThe Federal Home Loan Mortgage Corporation (FHLMC) is commonly referred to as Freddie Mac.

Freddie Mac foreclosures are homes that have gone into default and been returned to the FHMLC. They are usually cheap homes for sale, as government foreclosures are generally priced well below market. Additionally, Freddie Mac foreclosures are usually incentivized with low rate mortgages and low closing costs.

History of Freddie Mac

The FHLMC was started in 1970 to increase the secondary market for mortgage loans in the US. Freddie Mac buys the loans, combines them and offers them to investors on the open market as mortgage-backed securities.

Similarly to primary mortgage financing companies, Freddie Mac has no interest in owning the homes it receives due to loan defaults. This makes Freddie Mac foreclosures cheap homes for sale as the organization's desire for quick sales turns it into a very motivated seller.

Different from Ginnie Mae

A key difference between Freddie Mac and Ginnie Mae is that the Government National Mortgage Association (known as Ginnie Mae) does not buy loans, whereas Freddie Mac does. Freddie Mac’s   mortgages sometime result in foreclosed homes being owned by the organization. Also, Ginnie Mae is a government-owned corporation, while Freddie Mac is a government-sponsored enterprise (GSE).  Since it maintains status as a GSE, Freddie Mac foreclosures are classified as government foreclosures.

A focus on cheap homes for sale

The focus of Freddie Mac has always been affordable housing. By supporting mortgage market activity to encourage low mortgage rates and keep origination costs down, Freddie Mac has been helping families become homeowners since the seventies.

To serve its own best interests, Freddie Mac may create programs to help at-risk homeowners with their existing mortgages. Unfortunately, these programs cannot help all in need and some homes fall into foreclosure.  Freddie Mac foreclosures increase in inventory, providing an excellent source of cheap homes for sale that can be purchased both by owner-occupants and investors.

With Freddie Mac owning a significant amount of seriously delinquent mortgages in the nation, it is likely additions will continue to the Freddie Mac foreclosures inventory.

Freddie Mac Foreclosures Buyer Incentives

To promote increased sales of Freddie Mac foreclosures, special buyer incentive programs may be made available. These programs may ensure Freddie Mac REO homes are in good repair and incent realtors to sell Freddie Mac homes, which results in good-quality cheap homes for sale by realtors. Freddie Mac may also make repairs and improvements on their foreclosed homes, and may also cover closing costs -- saving buyers thousands of dollars..

In addition, to give owner-occupants a competitive edge in buying these low cost government foreclosures, Freddie Mac often reserves time to allow occupant buyers to exclusively submit purchase offers. This exclusive period is usually soon after the listing is first published. After this period expires, non-resident investors are allowed to submit offers on unsold Freddie Mac foreclosures.

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