Improving Dallas Housing Market Causes Fannie Mae to Make Changes

With the number of mortgage delinquencies on the decline, Fannie Mae is reevaluating its position in North Texas. As the North Dallas housing market continues to grow stronger, Fannie Mae expects to slowly shrink its footprint in Dallas.

A Bold Presence in the Dallas-Fort Worth Market

With Dallas serving as a hub for mortgage servicing activity, it should come as no surprise that Fannie Mae has a presence in the city. Not only is the city home to numerous companies, but it also offers a rich pool of employees who know how to deal with mortgage delinquency and how to prevent foreclosure. With the increase in mortgage delinquencies that occurred in 2008, Fannie Mae set up many teams of professionals in Dallas to help homeowners while also reducing the impact on Fannie Mae.

Currently, Fannie Mae has office space totaling more than 400,000 square feet within three office buildings. The Washington, D.C.-based lender employers fewer than 2,000 people, with workforce numbers slowly decreasing as mortgage delinquencies fall. While Fannie Mae declines to say exactly how much their Dallas footprint will shrink, many real estate experts predict the company will reduce its space to about 300,000 square feet.

Meanwhile, the company will likely remain in the Dallas North Tollway corridor. With the company’s current leases set to expire in the next few years, it will have the perfect opportunity to review its options and make adjustments as necessary.

A Closer Look at Fannie Mae

More formally known as the Federal National Mortgage Association (FNMA), Fannie May was founded in 1938 as part of the New Deal. As such, the government-sponsored enterprise was designed as one of many strategies to help pull the United States out from the Great Depression. The purpose of the entity, which has been publicly traded since 1968, is to expand the secondary mortgage market by allowing lenders to reinvest their assets.

Ultimately, the goal of Fannie Mae is to increase the number of lenders in the mortgage market by reducing their reliance on savings and loan associations. To accomplish this goal, Fannie Mae purchases home loans made by private companies, places the loans in mortgage-backed securities and guarantees payment of principal and interest to outside investors.

During the 2008 financial crisis, Fannie Mae failed due to a series of poor business decisions. Since the company relied solely on residential mortgage finance, the failure of the housing market left the company with no other form of income. As a result, Fannie Mae lost billions of dollars.

Due to concerns that Fannie Mae’s failure would make the housing market collapse even further, the company was placed under government protection. Today, the company is much stronger, but still has a debt to repay to taxpayers. Most experts estimate it will take the company 15 years to repay the debt. In the meantime, the government continues to play a major role in the company’s daily operations.

To learn about the housing market in the Dallas-Fort Worth area or to explore real estate opportunities in North Texas, contact our team of helpful real estate experts today.

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