Bank Owned Foreclosure – A Play on Words?  

It is very common to associate a foreclosure with a bank, and this idea is reinforced when we see advertisements for “bank owned” properties.  Mistakenly, we also believe banks are taking the biggest financial hit when a house is sold as a foreclosure.  However, the fact is that in many cases a foreclosure is not owned by a bank.  If not the bank, then who owns these distressed properties and takes the financial  loss?

Understanding Fannie Mae and Freddie Mac

Fannie Mae (Federal National Mortgage Association) was created in 1938 during the Great Depression by Franklin D. Roosevelt, set up as a government-sponsored enterprise(GSE), and later converted into a publicly traded company in 1968.  Freddie Mac (Federal Home Loan Mortgage Corp.)  was founded in 1970 so Fannie Mae wouldn’t have a monopoly on government-backed mortgages. Their collective purpose is to buy mortgages from savings and loans, banks and lenders to provide cash for more mortgages.  The mortgages purchased by Fannie Mae and Freddie Mac are packaged into mortgage back securities(MBS) through a process called securitization. This process transforms realtively illiquid loans into highly liquid securities.  Therefore, the bank or lender who originates your loan or that services the loan by collecting monthly payment is probably not the entity that owns the note.

While relatively unknown to the general public, the significance of Fannie Mae and Freddie Mac to the mortgage market cannot be underestimated.  Combined they hold approximately $5 trillion of  mortgages, about half of the nation’s home loans. Losses to Fannie Mae and Freddie Mac are expected to approach $400 billion before the foreclosure crisis ends.  The graph to the right from The Cromford Report shows the percentage of distressed sales by city, many of which were owned by Fannie Mae and Freddie Mac.

Who really pays for foreclosures?

On September 7, 2008,  Fannie Mae and Freddie Mac were placed into conservatorship.  The federal government now explicitly guarantees debt issued by Fannie Mae and Freddie Mac.

In a Jan. 2011 article from the Arizona Republic, Anthony Sanders, a former professor of real estate and finance at ASU stated, “Fannie and Freddie losses are passed onto the taxpayers.”

If you want to know if your loan is owned by Fannie Mae or Freddie Mac, click here.  I found out that my loan is owned by Freddie Mac, not the company I mail a check to every month.

The next time you are driving around and see a  HomePath or HomeSteps foreclosure rider on a Phoenix real estate sign, you can be assured that it is a Fannie Mae or Freddie Mac foreclosure, not a bank owned property. Additionally, it is not any bank that is taking the loss but the US government,  and ultimately you and I.

Related Posts:

2012 Real Estate Market Trend

Distressed Property Posts

In search of happily ever after with a Phoenix short sale offer

 Phoenix Waterfront Foreclosures for Sale in Gilbert and Chandler

$519,000 :: 3010 E CEDAR Drive, Chandler AZ, 85249

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4 beds, 3.5 baths
Home size: 3,606 sq ft
Lot Size: 17,859 sq ft
Added: 08/24/17, Last Updated: 09/20/17
Property Type: Single Family
MLS Number: 5651016
Community: MESQUITE GROVE ESTATES
Tract: MESQUITE GROVE ESTATES
The price of this listing was last reduced on 8/24/2017 by 5%
Status: Active


Please read the MLS complete. HUGE secluded lot!Employees and family members residing with employees of JPMorgan Chase Bank,N.A, its affiliates or subsidiaries are strictly prohibited from directly or indirectly purchasing any property owned by JPMorgan Chase Bank,N.A. Please READ through the MLS completely. As / IS sale, seller does NOT provide SPDS or CLUE disclosures. Buyer to verify all infoherein. DO NOT SUBMIT BLIND OFFERS!! Agent of record (not an associate) must register at the ARMLS box to validate the offer. Offers will otherwise be rejected as blind offers. It's usually best to TEXT with your questions. Cash offers must include updated proof of funds. Seller will NOT make repairs of any kind. Please do not adjust the thermosta

Listed with Merit Realty


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$185,000 :: 304 W Alamo Drive, Chandler AZ, 85225

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2 beds, 2 baths
Home size: 1,386 sq ft
Lot Size: 6,969 sq ft
Added: 09/14/17, Last Updated: 09/14/17
Property Type: Single Family
MLS Number: 5660092
Community: Dave Brown Unit 2
Tract: Dave Brown Unit 2
Status: Active


Great Chandler location. Nice pool home. 2 bedroom plus den. Big kitchen & dining room. Large laundry room. Garage converted to office & storage. Can be converted back easily. Covered patio. Nice swimming pool. Master bath exit to backyard. Figures/measurements are approximate - buyer to verify.

Listed with Realty West, LLC


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$399,900 :: 3340 S OLEANDER Drive, Chandler AZ, 85248

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5 beds, 3.5 baths
Home size: 3,126 sq ft
Lot Size: 8,276 sq ft
Added: 08/23/17, Last Updated: 09/14/17
Property Type: Single Family
MLS Number: 5650467
Community: COTTONWOOD SPRINGS LOT 1-201 T
Tract: COTTONWOOD SPRINGS LOT 1-201 T
The price of this listing was last reduced on 8/23/2017 by 5%
Status: Active


THIS HOME IS A ''GEM'' LOCATED IN A GREAT NEIGHBORHOOD, AND LISTED FOR A GREAT PRICE. THIS HUGE 3100+ SQUARE FOOT HOME FEATURES 5 BEDROOMS.. 3.5 BATHS... 3 CAR GARAGE AND ALL THE UPGRADES. ITS READY FOR MOVE IN AND WILL GO FAST. PROPERTY IS BEING SOLD VIA AUCTION. REVIEW PRIVATE COMMENTS FOR OFFER INSTRUCTION OR CALL ME FOR DETAILS. PRE-AUCTION BIDDING IS AVAILABLE NOW ON AUCTION.COM IF RESERVE IS NOT MET PROPERTY IS SCHEDULED FOR AUCTION STARTING 9/16/17 AND ENDING ON 9/20/17 SEE AUCTION WEBSITE FOR DETAILS

Listed with HomeSmart


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$258,000 :: 1028 N Evergreen Street, Chandler AZ, 85225

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4 beds, 2 baths
Home size: 1,887 sq ft
Lot Size: 8,276 sq ft
Added: 07/27/17, Last Updated: 09/14/17
Property Type: Single Family
MLS Number: 5638635
Community: College Park 6
Tract: College Park 6
The price of this listing was last reduced on 7/28/2017 by 0%
Status: Active


Great Chandler location with easy access to freeways for short commutes. Nice size interior lot. Swimming pool. Large covered patio. Screened porch. Living & family rooms. Brick fireplace. Nice kitchen overlooking back & pool. Large master suite with walk-in closet, dressing area, backyard access. Newer roof, HVAC, and water heater. RV gate off alley. Figures/measurements are approximate - buyer to verify.

Listed with Realty West, LLC


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$432,500 :: 4397 S MARION Place, Chandler AZ, 85249

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4 beds, 3.5 baths
Home size: 3,925 sq ft
Lot Size: 12,632 sq ft
Added: 08/30/17, Last Updated: 09/09/17
Property Type: Single Family
MLS Number: 5653313
Community: SYMPHONY 2
Tract: SYMPHONY 2
The price of this listing was last reduced on 8/30/2017 by 2%
Status: Active


This Home Has It All. Located In The Beautiful Gated Symphony 2 subdivision. Close to all amenities and top ranked Chandler schools This popular Hancock home offers 4bd/3.5ba/3cg with soaring ceilings. Huge kitchen for the gourmet cook in your life with custom tile counter tops and back splash. Master retreat has a 2 way fire place that sets the mood. Secondary bedrooms are very large with walk in closests. The professional expoxied 3 Car Garage with plenty of builtin cabinets for storage, work space and overhead lighting. Home Is Located On A Kid Friendly Street With A Private Park Not Too Far Away. Just Too Much To List. Don't wait.

Listed with Prime 220 Realty


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$499,900 :: 391 W WILDHORSE Drive, Chandler AZ, 85286

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7 beds, 4 baths
Home size: 4,685 sq ft
Lot Size: 8,712 sq ft
Added: 08/06/17, Last Updated: 09/05/17
Property Type: Single Family
MLS Number: 5643177
Community: ALMA SCHOOL PLACE
Tract: ALMA SCHOOL PLACE
The price of this listing was last reduced on 8/6/2017 by 2%
Status: Active


PERFECT HOME FOR LARGE FAMILY - 7 BEDROOMS - 4 BATHROOMS AND FINISHED BASEMENT. THIS HOME FEATURES A LARGE KITCHEN WITH ISLAND AND PLENTY OF CABINETS. FAMILY ROOM WITH FIREPLACE, FORMAL LIVING ROOM WITH DINING AREA AND 3 CAR GARAGE. BUYER TO VERIFY ALL INFORMATION AND MEASUREMENTS. BUYER TO VERIFY DURING INSPECTION PERIOD IF PROPERTY IS ON SEWER OR SEPTIC DUE TO BANK OWNED PROPERTY.

Listed with West USA Realty


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$261,000 :: 1264 E INDIAN WELLS Court, Chandler AZ, 85249

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3 beds, 2 baths
Home size: 1,812 sq ft
Lot Size: 7,840 sq ft
Added: 06/27/17, Last Updated: 08/11/17
Property Type: Single Family
MLS Number: 5625220
Community: SPRINGFIELD BLOCK EIGHT
Tract: SPRINGFIELD BLOCK EIGHT
The price of this listing was last reduced on 6/27/2017 by 4%
Status: Active


This is a stunning 3 brdm/2 bath split plan, with N/S exposure with a den/dining in the desirable 55+ Springfield Community. The kitchen opens into the spacious family room a perfect space for entertaining. Your backyard is private with a patio area. Springfield offers 2 heated pools,tennis,pickle ball,golf course,bar/grill, fitness center,dances,bingo, etc.

Listed with Revelation Real Estate


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$225,000 :: 6480 S NASH Way, Chandler AZ, 85249

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2 beds, 2 baths
Home size: 1,387 sq ft
Lot Size: 5,227 sq ft
Added: 07/10/17, Last Updated: 07/10/17
Property Type: Single Family
MLS Number: 5631150
Community: COOPER COMMONS PARCEL 8
Tract: COOPER COMMONS PARCEL 8
Status: Active


Cute home in a highly desirable Chandler Community. Home is a 2 bedroom plus a den. Nice open floor plan. Backyard has an extended Covered Patio

Listed with Revelation Real Estate


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$209,900 :: 133 E LAUREL Avenue, Gilbert AZ, 85234

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3 beds, 2 baths
Home size: 1,331 sq ft
Lot Size: 6,534 sq ft
Added: 09/16/17, Last Updated: 09/16/17
Property Type: Single Family
MLS Number: 5661266
Community: VILLAGE 2 LOT 90-225 & TR
Tract: VILLAGE 2 LOT 90-225 & TR
Status: Active


Light and Bright 3 bed 2 bath home with a Great Room and charming brick fireplace with a formal living room as well. Open Roomy eat in Kitchen loaded with cabinets and large pantry. Enjoy the very private backyard pool, large covered patio and storage shed. Walking distance to Old Town Gilbert. HOME BEING SOLD AS IS WHERE IS. BUYER TO VERIFY ALL INFORMATION DEEMED IMPORTANT.

Listed with HomeSmart


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$449,900 :: 3451 E ORLEANS Drive, Gilbert AZ, 85298

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3 beds, 3.5 baths
Home size: 2,843 sq ft
Lot Size: 9,583 sq ft
Added: 05/13/17, Last Updated: 09/05/17
Property Type: Single Family
MLS Number: 5605108
Community: MARBELLA VINEYARDS PHASE 2A RE
Tract: MARBELLA VINEYARDS PHASE 2A RE
The price of this listing was last reduced on 7/31/2017 by 1%
Status: Active


Spectacular 3 bed, 3.5 bath home with spacious floorplan. Enter and note the gorgeous wood look flooring and plantation shutters throughout. Open kitchen sports tons of cabinetry, granite counters and oversized island with breakfast bar, perfect for whipping up all your favorite recipes. Bonus room can be turned into an office, or den. One of the spare bedrooms has its own attached bath and private entrance. Large master with en suite bath featuring double sinks, soaking tub, separate shower and generous walk-in closet. Versatile backyard, whether it's a cook out with the covered patio and built-in BBQ, to just relaxing alone in the heated spa or practicing your stroke in the putting green. Come see today!

Listed with Revelation Real Estate


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$269,900 :: 647 E RANCH Road, Gilbert AZ, 85296

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3 beds, 2 baths
Home size: 1,655 sq ft
Lot Size: 6,534 sq ft
Added: 08/30/17, Last Updated: 09/01/17
Property Type: Single Family
MLS Number: 5653694
Community: NEELY FARMS UNIT 4
Tract: NEELY FARMS UNIT 4
Status: Active


House has great potential in a highlydesired Gilbert community.3 bedroom great room plan with a pool.Pool has been drained and cleaned and is being filled.

Listed with Realty Executives East Valley


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$344,900 :: 2971 E Sherri Court, Gilbert AZ, 85296

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5 beds, 2.75 baths
Home size: 2,827 sq ft
Lot Size: 7,840 sq ft
Added: 08/26/17, Last Updated: 08/26/17
Property Type: Single Family
MLS Number: 5652057
Community: Rancho Corona
Tract: Rancho Corona
Status: Active


An absolute gem in Gilbert, this home boasts amenities galore!!! Located in the Rancho Corona neighborhood with green belts and pocket parks throughout, this lovely large family home brings resort life to the backyard with a pebble-tec play pool, rock waterfall and tons of cool-dec. This open floor plan offers a gourmet kitchen with island, cooktop, built-in microwave and a dream pantry. The master suite is a true retreat with a spacious bedroom, attached sitting/workout room and great dual sink, bathroom with his and her walk-in closets. And kidsno worries, walk-in closets for each of the 3 additional bedrooms as well! And of course, there is shopping, business offices and easy freeway access to malls, restaurants and more.Please verify any information .

Listed with #1 National Real Estate Network LLC


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


Additional information about short sales and bank owned property can be found at Phoenix Waterfront Distressed Property