As if government seizure wasn’t enough, Fannie Mae and Freddie Mac are now being investigated by the FBI.  And as of today there’s a list of 26 other mortgage and financial services companies under investigation for accounting fraud and insider trading, among other things.

People will always need a place to live, no matter what….

Even the exalted halls of apartments and condos in Manhattan are subject to foreclosure these days, which is shocking considering the magnitude of current mortgages and the history of stable property values.

Property owners in Manhattan and elsewhere are calling Hope Now, an industry alliance setup to help troubled borrowers by providing counseling and mortgage negotiation services. 

Here’s the mission statement from www.hopenow.com website:

“HOPE NOW is an alliance between counselors, servicers, investors, and other mortgage market participants. This alliance will maximize outreach efforts to homeowners in distress to help them stay in their homes and will create a unified, coordinated plan to reach and help as many homeowners as possible. The members of this alliance recognize that by working together, they will be more effective than by working independently.”

Their phone number, the Homeowners Hope Hotline, is 1-888-995-HOPE.

Washington Mutual, the mortgage giant, has suffered enormous losses per share of common stock over the last 36 hours. It has roughly $180 billion of mortgage-related loans, and is likely to lose $9 billion to $14 billion this year, partially due to its subprime credit card portfolio.“If loss rates continue to rise, WaMu could see charge-offs of 4 or 5 percent by the end of the year,” a risk analyst is reported as saying. “Their entire capital could be wiped out.”

The largest bank failure on record occurred in 1984 when Continental Illinois National Bank and Trust in Chicago ran into trouble, a forerunner in the savings and loan crisis.  That’s been 15 years ago.

Washington Mutual, having assets of $310 billion, could literally drain the FDIC overnight. We’ve never seen a bank failure this large, not ever.

Mortgage lenders, large and small, never intended to become landlords of vacant properties. But it’s happening all over the country these days.

REO inventories are growing faster than local real estate markets can absorb the listings, so contractors who specialize in cleaning out and boarding up vacant houses are suddenly in demand.

MSNBC reports “Bank-repossessed homes accounted for about 17 percent of all U.S homes for sale as of June, according to estimates released this month by RealtyTrac, an Irvine, Calif.-based company that tracks distressed property trends. The actual number of bank-owned homes could be higher, since some are not formally listed for sale as lenders hold on to them hoping the market will improve.”

Some of us are well-versed in the fine art of vacant property management. Might want to give some thought to how your expertise in management of vacant properties could add to your own income now. I know I am.

Now we have something that could be called Feddie.

That’s what I call it. Fannie and Freddie are no longer. Now we have Feddie.

The Federal Housing Finance Agency (FHFA), created by the US Congress this past summer, stepped in today to take over the two companies that own or guarantee 5 trillion dollars of home loans, which represents half of the mortgage debt in the US.

James Lockhart, director of the FHFA, is quoted as saying that in the transition of both Fannie and Freddie, both companies will be allowed to increase the size of their holdings of mortgage-backed securities, but that dividend payments on both the common stock and preferred stock of both companies will cease.

This could get very interesting very fast.