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Updated over 1 year ago,
Buyback FNMA Mortgage at less than face value
The face value of any given mortgage note hinges upon a few things, but lets consider it's a 1) conforming, 2) performing, and 3) in the green meaning favorable LTV.
Now let's assume it's a 15yr conventional mortgage @ 2%, which until recently was readily available for qualified borrowers. That mortgage is no longer worth what it was originally valued at. With the runup in rates (2-3x the 2% mentioned), how would one buy their mortgage back at less than face value? The rise in rates should have reduced the face value of the note, especially relative to new notes...
This was apparently possible in the 80s when banks held the notes - they wanted the money back to lend out at MUCH higher rates. With most loans federally backed (if that's the right term) is this even a thing?