Joe's Money

Lets take a quick peak at October months end account balances.

Local accounts went down a little.  As stated before these accounts include bill accounts and some emergency funds.  Car insurance was due this month.  Yippee!  Most other accounts increased.  401k and IRA both went up due to contributions and mediocre market conditions.

Debt also went down slightly.  If you can’t tell, my mortgage is in its first year so the payments don’t add up very quickly.  As for my car, I think I need to hit that a little more aggressively.

Well well…  I received a notice in the mail today informing me the ownership of my mortgage has been transfered, sold, or assigned to our good friend, Fannie Mae.  What does this mean for me?  According to the notice, nothing.

Since I am in a fixed 30 year loan at 4.85% interest, my loan rate will never change.  The Fannie Mae notice also reflects this stating: The transfer of ownership does not affect any term or condition of the mortgage.

Something I learned from this notice…  I was always under the impression that Fannie Mae, along with others, originated (Issued) loans.  This appears to be a false assumption.  It states “Fannie Mae is a shareholder owned company with a public mission.  We do not make mortgage loans but instead provide funds to lenders by purchasing the loans they make.”  I had no idea.  Maybe I’m the only one that was clueless about this.

I had heard of loans being sold over and over when I started to look for financing for my home.  I chose a local credit union to try and avoid this but it looks like I failed considering my loan was sold not even 6 months later.  I still make my payments to my credit union but I still find this odd.  At least I didn’t end up sending my money to another bank I really can’t stand.  My credit union has always been leaps and bounds better than any bank I have ever tried.  I really wanted to keep my money within this community based organization.  At this point, I would only assume the interest made off my mortgage payments will go to Fannie Mae.

I wish I could make the assumption that all loans picked up by Fannie Mae were as secure as mine is.  If that were the case, maybe I’d buy a few shares.  After seeing them implode as of late throughout the housing bubble, I doubt thats the case.

Lets take a look at where we are starting.  Here are my current account balances.

This month, the HSBC Direct online savings account balance dropped.  I moved $2,500 from HSBC to my Roth IRA.  This was the initial deposit.  Other accounts increased in value.