Mortgage Bailout

George - 2 posts in 1 week, your on a roll! So, what is your professional opinion in regard to the government taking over Fannie Mae and Freddie Mac?

Lenn, you have been around long enough to know that something like this will take time to realize the full impact.

Sandra, yes very unusual for me :)

I think this is good for the short term, because it seems to have calmed investors down a little bit.  As a result interest rates went down today like I mentioned in the blog.  But I do not think that it is the long term solution.  I do not like putting taxpayer money at risk to bailout companies institutions like Fannie and Freddie.  I am having real mixed emotions on this one.

I know the government didn't have many options when it came to this, but I'm worried about this continuing pattern of "when you screw up, don't worry, because the taxpayers will bail you out.  Greenspan was asked to do more regulation in the mortgage industry several years ago, but he declined because he didn't feel it was the government's responsibility.  So, now it's our responsibility.  I hear the two heads stand to walk away with 15 million apiece, great reward for wrecking two institutions.  I also hear the auto industry is looking for help for the government.  Can you blame them?  After all they did it for the other guy.

Yeah...just got off the phone with lender.....and yeah...short term looking good....long term...well, you guys will keep us informed for sure! Thanks George....

Pound the pavement hard right now....and put it in the bank!  That's my motto.

George.. I couldn't believe my eyes.. and I did a double take.  You did two posts.. in one week no less.  Thank you for posting this one.  I was hoping you would.  Your information is always very reliable.

George - well time will certainly tell. For now some poaitive news. Keep us posted as you always do. Are you getting back into the habit of posting? Hope so.

Jeff

Jerry, like I said to Sandra, I have a lot of mixed emotions on this one.

Sally, let's hope this works out for the best, but when the government get's involved, I get nervous.

Valerie, I will be doing my best to keep you guys over at Johnson Real Estate up to date.

Jeff, I just got lucky today that I had a little time and this one came easy.  I would like to post more, we will see.

George,

Good post!  Jim Cramer was on the Today show this morning and said the move was going to be best for consumers in the short term and help stop the trend of falling home prices.  I also read where they had replaced most of the top management at both companies - does this mean that the new management will be more conservative?  Since a branch of the government will be keeping a close watch on activites at Freddie and Fanny, I doubt that lending guidelines will get easier!

Ed I am not sure how the whole re-structuring will work.  We have a phone conference at McCue Wednesday morning and I will get more information on this then.  Fannie's biggest problem seemed to stem from Subprime and not the conventional side, but there guidelines have been pretty liberal even on the conventional side.  I am sure we will start to be handed down changes soon, I will try to post or stop by your office as they happen.

Same with MANY LO's here....they feel the same.....That's why I say.....everything we make now...bank it...we just may have a different view come January. :)

In the meantime... what's happening today? 

George I too was happy to see your post.  The intervention by the government seem to have been well received by Wall Street and the foreign financial markets.  Time will tell how this plays out.

I saw the drop in the interest rates.  I hope that will get things moving in a more positive direction.

Oh my god..two blogs by you in one week? I guess it takes another catastrophe in your industry to have something good to talk about....so tell me because it's important...will this effect all the short sales I'm trying to close?

George -- you are on a roll this week!  I think the bailout was probably necessary to stop the bleeding!  I guess all of those lobbyists are now out of a job -- too bad the regulators were asleep at the wheel when all of this mess began!  I hope this works out in the end -- as you and others have said, only time will tell.  It is to bad that congress is so reactive -- instead of pro-active!

Sally, putting some money away and creating a little safety blanket is always a good idea, but it is something that people these days seem to not do.  More need have your attitude about this.

Jennifer the initial impact seems to be positive, let's hope it continues.

Randy, that is one of the objectives, let's hope that it is one that is achieved.

Neal, yes two in one week is very unusual for me, heck two in a month these days is unusual, but these are unusual times.  I don't see how this will have much of an impact on short sales, those people are in a world of their own as you well know.

Joan, excellent way of putting it "reactive -- instead of pro-active".  A lot of this could have been avoided, but when greed comes into the picture, common sense seems to take a back seat.

George I love it when you blog more than once a week...... :) 

Fran, thank you!!!!

George,

I'm now expecting you to write a blog at least once a week now...even if it's about garbage:)

Neal leave it up to you keep the good natured ribbing going ........... LOL

Hi George!  Thank you for the much valued information.  Please do keep us posted

Dianne, I will try to provide any new information to this as it happens.

George- Happy to find you posting on this imomentous event to keep us informed. It is truly unnerving that these two giants of the real estate industry should be in this situation. It make one wonder if matters could get worse. I am hoping that we have come to the end of what ails the industry and that the lowering of the interest rate is the light at the end of the tunnel. I am afraid to become too optimistic. We will depend on you to help us stay abreast of what is happening.

this re-structuriing is a great move, it is not a silver bullet, but it is the best that could be done , and quickly

Eloise I really hope that you are right and we started to see a turning point.

James, time will tell, and it would be nice to see some positive results come out or this.

Great post. Thanks for keeping us posted.

Daisy you are very Welcome.

Beyond Freddie and Fannie - today was a landmark day.  The future is worry-some for our next generation.  I can only continue to remain positive and my business is flourishing in a down market. I am thankful.  However, there are many that are suffering.

George - I'm glad to see the interest rates go down but am concerned about the long term effect - another arm of the government in the financial sector.

Tracy, I know this is an unsettling time, I still remember the bank failures of a couple of decades ago.  But lets hope that there have been enough safety nets put in place that we do not have a repeat of that.

Judy, I am not a fan of government intervention either, it seems that they mess up more things then they fix.  I hope this is one of the fixes and not one of the messes.

Does anyone remember the S & L scandal of the eighties? Real Estate was a large aspect of this piece of financial history. Many banks failed that had been in business for over 100 years. I don't recall the government doing a huge bailout then. It took well over five years for everything to "shake out" without a huge subprime sector; very similar to today but also different. I think this is going to take several years, there isn't a bandaid big enough to cover this "boo boo".

Neelloc, I remember that.  My mother and father had their money in one of those banks.  It was a good thing that they did not have to have it right away and were able to get by, but it was a very uncomfortable time for them.

What do you think of this new bailout plan price tag

-- a takeover of a half-trillion dollars or more in worthless mortgages and other bad debt held by banks -

 how's that if it trickles down to US taxpayers??

James Wexler and George, I don't think we have learned anything from history. It all started back in the 70s with nixon and the fact that monopolies couldn't be properly redressed from buying up more companies because if that happened, well, it would affect too many people.  Then we had Enron, different issue, same thing.

Then like James said, the S and L crisis. Then we find ourselves here. I remember writing a blog post asking how housing prices were allowed to bubble as they did. (This is Cleve after all so it didn't happen here lol).  The basis of what I learned was that appraisers only care about the amount that is going to be mortgaged so if you put down 100k more than anything has ever sold and mortgage the rest it worked. That makes no sense to me, there should be an appraised value based on the market and not the mortgaged amount.

And then since the 80s we've gotten into the habit of saying that being in debt is okay, it's the american way. And credit card companies will go out of buisness and ruin our economy if everyone pays them off every month. Bad for our economic system.  Well guess what. It's worse this way!

George, it's a mess! lol  Yes, plz keep us informed

And plus, all these homes are still going to be on the market, foreclosed, just owned by someone else.  How does that really help the housing market? (Now Im talking about the Bailout plan)

James, I keep hearing that the price for not doing anything would have been worse. I don't know the pit of my stomach does not like this, I hope the pit of my stomach is wrong.

Carole, that is a lot of questions ........ LOL

It would take a blog to answer all of them, that is if I had the answers.  These are uncertain times, and I guess the best we can do is to try to keep positive, and try to work through this.

George- I am late getting yo this post that seems like old news now even though we are still reeling from the effects. Please keep posting. The need to know what is and what's going to happen is urgent.  

Eloise, it seems that each day is bring more uncertainty.  It would be nice to get back to the old boring process of writing loans.  Boring would be good right now.