National Realty News

Back in 2008 as property values were plummeting one thing was going up. Your property taxes. Local governments were on a spending binge on the tax money that had been pouring in as property values continued to rise.

Property taxes were the Golden Goose for local politicians and they could not believe that the goose was dying.

According to census data recently released, in fiscal year 2008 (July 2007–June 2008) property taxes rose 4.2 percent as home values fell 16 percent.

For those of us in the real estate business, this was a jarring disconnect. So many families were watching their equity in their home

s disappear or go upside down, yet the politicians were looking to fill their bloated pocketbooks even more without a clue on how it was affecting the population. Florida, Indiana, and New Mexico had the nerve increased their property taxes over 10 percent in the year.

Here is a list from the census bureau of the top 10 states that raised their taxes the most in fiscal year 2008.

Top 10 States With the Largest Property Tax Increases in 2008

Rank State Increase Per Capita Tax 1 Florida 11.7% $1,649 2 Indiana 11.6% $1,089 3 New Mexico 10.2% $568 4 Hawaii 9.7% $977 5 Nevada 9.2% $1,241 6 Alabama 9.1% $495 7 West Virginia 8.7% $683 8 Oklahoma 8.4% $582 9 Minnesota 7.6% $1,273 10 California 7.6% $1,449 via the Tax Foundation

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Property Values Fall As Property Taxes Rise

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Fannie Mae is taking a dim view of mortgage borrowers who try to scam the system by taking out new loans while their mortgage is being processed. Typically banks will check your debt to income ration in the beginning of the application process.

Some borrowers took that as a green light to add debt right after they qualified for the new loan. Now banks will be expected to monitor for new debt or take out a 2nd credit report just before the mortgage closes.

It is a smart move for both lenders and borrowers alike to have this check in place. Banks know what kind of debt limits families can live with, and what debt limits get them in trouble. The limits are a protective layer for all involved. To circumvent them will give the homebuyer a short term gain, however the long term pain will be felt for a long time to come.

So I applaud Fannie Mae for this move. It is an example of smart lending and good for all parties.

Although Fannie made no reference to specific services in its recent clarification letter to lenders, some commercially available programs claim to be able to monitor mortgage borrowers’ credit activities on a 24/7 basis, flagging such things as inquiries, new credit accounts and previous accounts that did not show up on the credit report that was pulled at the time of initial application.

One of those services is marketed by national credit bureau Equifax and dubbed “Undisclosed Debt Monitoring.” Aimed at what Equifax calls “the quiet period” between application and closing — often one month to three months — the system is “always on,” the company says in marketing pitches to mortgage lenders.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Taking Out A Mortgage? Banks Will Monitor Your Credit 24/7 Now

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The Housing and Urban Development Secretary Shaun Donovan has announced that a new emergency loan program for homeowners is on it’s way. There have been no details announced with the program, but it looks like the White House feels it needs to respond to the poor housing numbers with another program.

The Obama administration plans to set up an emergency loan program for the unemployed and a government mortgage refinancing effort in the next few weeks to help homeowners after home sales dropped in July, Housing and Urban Development Secretary Shaun Donovan said.

“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said on CNN’s “State of the Union” program yesterday. “That’s why we are taking additional steps to move forward.”

The administration will begin a Federal Housing Authority refinancing effort to help borrowers who are struggling to pay their mortgages, and will start an emergency homeowners’ loan program for unemployed borrowers so they can stay in their homes, Donovan said. via Bloomberg

Of course, the housing numbers fell because we are in the hangover from the last “bailout by the Federal Government of housing financing, the new homeowner tax credit. But that was so yesterday.

Instead, let’s belly up to the bar and have another round of taxpayers money to get the housing party started.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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I have never heard of having to write a letter to the mortgage company explaining why a person needed a home loan and certain family circumstances associated with this loan. But that is the story coming from the New York Times as a Linda Falcao and her husband were asked to write a motivation letter on why they were making a home purchase and the family status while making the purchase.

Besides asking for information about their family plans, which was paired with questions about plans to change the “property size,” Wells Fargo also requested that the letter include information that supported the fact that the property, in Glen Mills, Pa., would be their primary residence. The bank also asked them to include their commuting distances to work, as well as other properties that they may own in the area. The request for the so-called motivational letter was included in the bank’s mortgage commitment letter, which offered to approve their loan if they answered the bank’s questions and provided other documentation.

A Wells Fargo spokesman said that motivation letters were generally requested when the loan underwriter had more questions about a borrower’s “occupancy intentions.” For instance, he said the company might request such a letter when a family’s existing home is not yet sold and it wants the buyer to show that the new home will indeed serve as the primary residence. via the NY Times

There are certain questions that federal lending standards prohibit lenders from asking. The Fair Housing Act prohibits lending based on disability, sex, or family status, yet Wells Fargo seemed to have crossed that line.

We all know lending has tightened up these days and borrowers are willing to divulge more information to get a home loan. That is not the issue. The problem is when the banks cross the line.

I think Wells Fargo might have in this situation.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Wells Fargo Requesting Motivation Letter From Potential Borrowers?

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While analysts were expecting an annualized existing home sales level between 5.37 million and 4.6 million homes, the numbers came in much lower than that. The seasonally adjusted number was 3.83 million, down 27.2 percent.

The combination of the tax credit expiration that pulled forward summer sales, a tough credit market, and unemployment hovering around 10 percent was enough to stop the nations home buyers in their tracks.

NAR economist Lawrence Yun expects home sales to rebound towards the end of the year and get back to the 5.0 million level, but for agents and brokers who expect the summers to be their busy time of the year, this report will be a tough pill to swallow.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.

Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995. via NAR

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Existing Home Sales Plummet in July, Down 27 Percent

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Florida Realtors, formerly the Florida Association of Realtors, has negotiated a settlement for Realtors who have been affected by the oil spill in the Gulf of Mexico. Terms of how the Realtor group will handle the dispersement of funds has not been released yet, but I am sure agents will be looking for their share.

The BP oil spill in the Gulf has impacted many businesses, with real estate being just a small part of them. The tax credit expiration coinciding with the Gulf spill has mitigated the Realtor’s argument of lost funds as home sales showed an increase during this period of time. However, as we all know, the impact is being felt and psychologically it will be felt by home buyers long into the future.

Now the next stage to watch is how the Realtor board will determine the payout for agents. My guess, this will be the real fight.

Florida Realtors — the former Florida Association of Realtors — negotiated $16 million from the fund to compensate agents for lost sales and broken contracts stemming from the Gulf oil spill.

John Sebree, lobbyist for the Realtors, said that the money will be distributed to agents through a claims adjusting firm which also is handling the work for four other states.

“It may not go terribly far,” Sebree said. “But it’s a step in the right direction.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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If you are looking to invest, home builders are probably not your safest bet these days. The glut of foreclosures, the hangover from the tax credits, and the threat of continuing high unemployment signals a tough time for the home builders in the coming year.

Standard and Poor’s analyst Ken Leon downgraded four homebuilders this week in response to the economic indicators facing the industry. Ryland Group was downgraded to strong sell from a hold position while KB Homes, Meritage Homes, and D.R. Horton were downgraded to sell status.

And this is not just one analyst’s opinion, it is one shared by the home builders themselves. The monthly survey by the National Association of Home Builders of actual home builders sentiment was near an all time low.

It is an interesting time when the home builders and the analysts actually agree on the state of the construction industry.

Meanwhile, builder confidence continues to fall. Earlier this week, the National Association of Home Builders said its index that measures confidence in the industry posted a reading of 13, the lowest level since March 2009. Any reading above 50 on the index indicates more builders view sales conditions positively than see them negatively.

New home sales this summer-usually the most active season for new home purchases-have been particularly slow, dipping to historic lows in May, and S&P predicts fewer orders and more cancellations from all four of the downgraded stocks before year’s end.

Builders may have to wait until next summer for orders of new homes and sales to pick up, Mr. Leon said: “Between now and May or June of next year, it’s not going to be pretty news.”

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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If this number does not curl your toes, nothing will. 1,000,000 foreclosures means 1,000,000 families fearing they will be moving out of their home. 1,000,000 families lives will be turned upside down. 1,000,000 buildings will have to be processed and sold. This is not pretty by any means.

Just sayin’.

RealtyTrac reported that the number of U.S. homes lost to foreclosure surged in July to 92,858 properties, up 9 percent from June. The pace of repossessions has been increasing and the nation is now on track to having more than 1 million homes lost to foreclosure by the end of the year. That would eclipse the more than 900,000 homes repossessed in 2009, the firm says. via Breitbart

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

1 Million Foreclosures in 2010

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With so many families facing foreclosure you know we will see every effort to save their houses. The Sovereign Citizen movement started originally with farmers trying to save their farms but now has moved to the suburbs.

Essentially by declaring oneself a “Sovereign Citizen”, the person is saying they renounce their citizenship and are a law unto themselves. This is boiled down and simplistic, but it does capture the essence of the movement.

Now I personally feel that the people doing this are disingenuous at best and narcissistic at worse. They will take all the safety and security we as a nation provide without bearing any of the responsibility.

Sure the people are trying to save their house, but imagine if police put signs up saying they have no jurisdiction on the person’s property and any actions done to them within the confines of their home and land will not be prosecuted?

I doubt this is the result these families were looking for.

Ivan Willis Taylor and his wife, who goes by Princess Donya Taylor, have declared themselves sovereign citizens. The windows of their Stone Mountain townhouse are plastered with signs telling everyone the couple is immune to Georgia laws, according to Channel 2 Action News.

Stone Mountain police and Rockdale county sheriff’s deputies were able to easily nab the couple because their  car, with fake diplomatic tags, had flat tires.

Princess Taylor is now charged in Rockdale County with residential mortgage fraud. She was previously evicted out of a house in Conyers. Her husband is accused of forgery and making a false statement. via the AJC

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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The folks who have housing on the Gulf of Mexico are still facing a hard time from the oil spill of this summer. Sure the well is capped, but the perception of Gulf property has been damaged and it will take a long time for the perception to change.

For housing to rebound there has to be enough confidence that the oil will not return for tourists to return to the Gulf Beaches in the numbers that had in the past and for the fishing and oil industries to to come back to their previous levels.

The housing markets have been hit at both ends. The blue collar fisherman and oil workers have been out of work for a long time. Sure, BP is compensating many of them, but that does not mean they have a job and are looking to invest in housing. The low end of the housing market in the Gulf region has been huge.

Add to that the top end beach rental market was devastated this summer and you have the makings of a crisis. The weak housing market, especially in Florida, has not been in a position to weather another downturn. Experts are predicting housing prices to drop another 10 percent because of the spill. That can not be absorbed easily.

Studies on the effect of the Gulf oil spill on housing in the area show:

•The impact of the spill on home values in communities already affected by the spill is expected to range from $648 million over one year to as much as $3 billion over five years, according to an Aug. 2 report by CoreLogic. Of the immediately affected areas, the largest overall loss in value would be in Pensacola ($1.6 billion), followed by Gulfport, Miss. ($1.2 billion).

“The guy who is renting is going to see an immediate loss,” says Mark Fleming, chief economist at CoreLogic. “If I’ve lost this value, do I have some right to compensation?”

•Housing prices are likely to fall 10% in total along the 569-mile coastline, where there are about 14,396 acres affected by the spill, according to CoStar Group, a commercial real estate analysis firm in Bethesda, Md. Assuming that the developed beachfront property has a present value of $3 million an acre and the value drops 10%, that would come to $4.32 billion of land value lost because of the spill.

•In Florida, the state is the least able to bounce back from another real estate setback. Some coastal areas in Florida are being affected by the spill. According to a Fitch Ratings report, Florida already ranks the worst among all states in mortgage delinquencies across all product types. Further economic stress brought on by the oil spill and declines in the tourism and fishing industries are likely to increase default rates.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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For those who know of Tyler Perry’s work on television and in the movies, he is often congratulated on bringing down the house. Now in real life he may just be doing so.

The word on the street is that Perry bought the newly built 32,000 foot mansion on a 58 acre property that runs along the Chattahoochee River just north of Atlanta. The home that took 4 years to build will now be torn down so Perry can build his own dream house.

The actor and entertainment mogul who is the creative force behind TBS sitcoms “Meet the Browns” and “House of Payne,” may soon take up residence in north Fulton County. Perry is the new owner of Dean Gardens, a 58-acre estate on Old Milton Parkway in Johns Creek, according to a person with direct knowledge of the deal.

The $7.6 million property sale was completed in late July, according to FMLS, the local real estate listing service, but the buyer was not named. The house, most recently assessed at $6.5 million, took more than four years to build. Off and on the market for 15 years, it was to have been the dream home of the former property owner Larry Dean and his former wife, Lynda, but they separated not long after construction was completed…

The 32,000-square-foot mansion currently on the property will be torn down and it is believed Perry will build his own home. The gardens and location along the Chattahoochee River were two of Perry’s favorite features of the property, the source said.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Tyler Perry Buys Atlanta Mansion To Tear It Down

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If you are traveling to New York City in the near future, beware of the bed bugs. According to a recent survey by the Daily News, 1 in 10 New Yorkers has bed bugs. What is even worse, experts say that only 50 percent of people have a reaction to them. So the problem is probably worse.

CNN was in the news recently after their New York offices were shown to be overrun by these pesky creatures.

Once thought to be gone after an eradication effort in the 1940s through the use of DDT, bed bugs are now back and highly resistant to the chemicals being used to fight them. The scare campaign against DDT in the 1970s has stopped DDT being used in most of the world so do not expect Mayor Bloomberg to start using it, but it would be the smart move.

Of course, using DDT to eradicate mosquitos that kill millions in the 3rd world from malaria would also be the smart move, but the powers that be still think that DDT is more dangerous. But that is another topic altogether.

It will be interesting to see how New York City deals with the bed bugs. Will they be a nuisance gone soon or will they be taking over Manhattan?

A new Daily News-Marist poll suggests that The City That Never Sleeps is probably too busy itching: One in 10 New Yorkers has now battled bedbugs in their home. That’s twice as many as the city estimated were plagued by the pests in 2009.

The poll results suggest that more than 800,000 New Yorkers have had bloodsucking bedbugs crawling in their sheets. “I got all chewed up,” said Margaret Martinez, 61, of the Bronx, one of the 11% of poll respondents who reported having personal run-ins with the tiny bloodthirsty insects.

“I woke up and I had bites all over my arms and my face. I was all swollen,” she said.

From swanky glass lofts to creaky tenement walkups, the plague of parasites appears to have spread fairly evenly across the five boroughs. Via the NY Daily News 

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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London’s Hyde Park has some of the most expensive real estate in the world. The new One Hyde Park development is leading the way with 86 units starting at around 32 million dollars and going up to the 220 million dollars sale of the six bedroom penthouse recently.

With the influx of money from Russia and the Middle East, London has become the premier destination for high end real estate. Demand for the best real estate has driven up prices as for the “money is no object” set demands the best mainly for bragging rights.

A six-bedroom penthouse at London’s posh One Hyde Park development  has just sold for a record-breaking £140 million, or about $220 million, making it the most expensive piece of residential real estate in the world (in terms of current listings and sales). The massive deal eclipses the paltry $150 million asking price for The Manor, Candy Spelling’s monstrous mansion in Holmby Hills, California, previous holder of the World’s Most Expensive title. While the identity of the buyer remains a closely-guarded secret, speculation is centering on oligarchs and oil sheikhs, the London Telegraph reports. The palatial penthouse stretches across two floors and boasts bullet-proof windows, a panic room and stunning views across the Serpentine lake in Hyde Park. via Luxist

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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With the rise of the powerful federal government, policy decisions coming out of Washington DC are having more and more influence over our economic decisions. When it affects the auto industry or the banking industry, these decisions may affect those of us involved in real estate, but it will not change our lives.

However, now the federal government is looking to overhaul it’s regulations on real estate and housing.

Other critics say eliminating or overhauling Fannie and Freddie isn’t enough: The government must reconsider such bedrocks of housing policy as the mortgage interest deduction and the tax exemption of most capital gains from home sales.

They say these misguided or outdated government policies encourage the United States to massively overinvest in housing, shortchanging other parts of the economy. “There’s only so much subsidy to go around at the end of the day,” Katz says.

The administration isn’t tipping its hand in advance of a conference next Tuesday on housing finance reform in Washington. But officials insist that big changes are coming to housing finance. Treasury Secretary Timothy Geithner has said the reforms must: continue to make mortgage credit widely available; promote affordable housing for home buyers and renters alike; protect consumers from predatory lending; and promote financial stability.

“We have committed to having a proposal in place by early next year,” says Federal Housing Administration Commissioner David Stevens. “This is not about delaying. This is about being thoughtful.” via USA Today

Imagine waking up in 2012 that the government eliminates the mortgage interest deduction. How would that affect your business?

Imagine that Freddie Mac and Fannie Mae change their lending criteria? How would that affect your business?

Imagine FHA turns off the lending spigot and those loans go away? How would that affect your business?

These are not just vague questions. These are policies that are under review in Washington DC right now by the Treasury Department. There are people there who do not believe home ownership is a valuable part of the American Dream and are not eager to help families achieve this goal.

In fact, there are many in the present White House who believe that the mortgage interest deduction is an unfair give back to the rich and needs to go away.

Folks, let us be honest. Many of us work in an industry that is subsidized by the Federal Government. The rules have remained the same since 1945 so we have become very complacent. Yet all it takes is an activist White House, and I promise you this is an activist White House, to change the rules of the game.

So you should carefully watch what comes out of Washington regarding real estate and housing policy. There may be huge changes coming that may completely change the dynamics of how you earn your living.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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Are you living in your small town waiting for the day that you can move to the big city? Or are you a college senior looking for the place to live after graduation and have the most outrageous time living on your own?

We have the list for you. A cool city is one that has lots of things to do. Museums, bars, restaurants, sporting events, bars, galleries, nightclubs, bars. You get the picture.

But a cool city also has a vibe. You walk around and people are stylish. They radiate with the clothes and attitude that aura of cool that is so hard to describe but everyone knows it when they see it.

So if you are looking to live in a cool place, check out these cities.

Top 10 Coolest Cities In The United States To Live In

1.  New York
1.  La Vegas
3.  Seattle
4.  Chicago
5.  Oakland
6.  Orlando
7.  San Diego
8.  Los Angeles
9.  Miami
10. Washington, D.C.

via Forbes

Tags: Cool+Cities

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The clean up the ownership situation of Peter Cooper Village and Stuyvesant Town in Manhattan is a prime example of the inertia that is created once deals start happening. And for many of the buildings residents, the injection of the marketplace is going to be very interesting to say the least.

There are strong indications that the new debt holders of Peter Cooper and Stuytown are looking to take the complex co-op. Pershing Square Capital and Winthrop Realty have bought up a great deal of the debt. Pershing’s William Ackman is recommending the conversion from rent controlled apartments to co-op units.

Mr. Ackman, who hadn’t disclosed his interest in the complex previously, said Monday that his group would convert units in the complex into cooperative apartments in what would be one of the largest conversion efforts in the city’s history. “The value of the property as a co-op is much higher than the value of the property as a rental,” he said in an interview.

Mr. Ackman said his group would work with the complex’s tenants association to ensure the co-ops would be affordable so people who live there now would be able to buy their units. He noted that his venture can afford to offer low prices because it bought the debt at such a steep discount to its original value of $300 million—spending about 15 cents on the dollar, or a total of about $45 million. via the WSJ

Having lived in Peter Cooper years ago as well as doing a number of posts on the subject I know the residents are very eager to maintain the status quo. Very eager.

But after the initial purchase and then the bankruptcy, the vultures are moving in. What we will now be seeing is pure capitalism. BlackRock and Tishman Speyers made the deal as an ego play and agreed to terms with the tenants to get the deal done. That was unsustainable at the purchase price they found out.

Now the hedge funds and vulture firms are moving in, buying the cheap debt, and are looking to monetize Peter Cooper Village and Stuyvesant Town as effectively as possible. There is no love in the deal anymore, just cold hard cash.

The combination of a prime location, renters that do not have an ownership stake, and cheap debt now will allow the new caretakers of Peter Cooper and Stuyvesant Town to try to monetize the community through making it a co-op as quickly as it can.

Watch out below is all I can say.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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The Xanadu mall project in New Jersey’s Meadowlands has been a mess since it’s early days. The project has ballooned out of control and now has an estimated price tag of 2 billion dollars.

Now Colony Capital LLC is expected to turn the keys of the project over to it’s creditors led by Dune Capital Management. The black hole that is Xanadu keeps growing. The project, originally put together by Mills Corp, has had a rough history. It was created and designed in the peak of the real estate market and has enough invested in it that no one wants to pull the plug.

Originally expected to open in 2007, delays have been numerous mostly due to funding issues. Now we will have to wait to see what the creditors do with the project.

Billionaire investor Thomas J. Barrack Jr.’s Colony Capital LLC may be forced to relinquish control of Meadowlands Xanadu, the unfinished $2 billion shopping and entertainment complex in New Jersey, almost four years after leading a takeover of the project, according to four people with direct knowledge of the matter…

“If Colony hands over the keys, that would indicate the firm doesn’t think Xanadu is most productive use of their resources despite the significant amount of capital they’ve already committed,” said Ben Thypin, an analyst at Real Capital Analytics Inc. in New York. “That shows it’s uncertain as to when Xanadu will produce income, much less become profitable.” via Bloomberg

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New Jersey’s Xanadu Mall Heading To Creditors

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One of the big questions that has been asked in the aftermath of the housing meltdown has always been, how did things get so out of control? New information coming out of Washington shows that Fannie Mae was aggressively pushing Countrywide to sell it more loans, no matter the quality.

Yes, you heard me right. The “quasi” government agency developed plans to court the poster child of bad lending, Countrywide, to sell it more and more loans going forward. They drew up plans to achieve this goal according to a new New York Times article.

Nine bullet points fall under the heading “Fannie Mae’s Top Strategic Business Objectives With Lender.” The first: “Deepen relationship at all levels throughout CHL and Fannie Mae to foster alignment and collaboration between our companies at every opportunity.” (CHL refers to Countrywide Home Loans.) No. 2: “Create barriers to exit partnership.” Next: “Disciplined Risk/Servicing Management” and “Achieve Fannie Mae Profitability Goals.”

And as the late great Billy Mays said, but that is not all. To understand the rot in the system and the pressure coming down from Freddie Mac and Fannie Mae, think of this. 26–28 percent of all their loan buying activity came from Countrywide during the peak of the bubble. And they were pressuring Countrywide to sell them more and more loans.

Outwardly, Fannie and Freddie wrapped themselves in the American flag and the dream of homeownership. But internally, they were relentless in their pursuit of profits from partners in the mortgage boom. One of their biggest and most steadfast collaborators was Countrywide, the subprime lending machine run by Angelo R. Mozilo.

Countrywide was the biggest supplier of loans to Fannie during the mania; in 2004, it sold 26 percent of the loans Fannie bought. Three years later, it was selling 28 percent. What Countrywide got out of the relationship was clear — a buyer for its dubious loans. Now the taxpayer is on the hook for those losses.

To be honest, it is amazing how we are not in even worse shape than we are with this malfeasance coming out of Washington. The biggest question is why are we continuing to subsidize Freddie Mac and Fannie Mae?

Would there not be a better alternative that is not as full of institutional rot than these two companies? At what point do the termites so destroy the house that it is better to bulldoze than to try to repair the damage. Or are we afraid to see the true damage a bulldozer would uncover?

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Freddie Mac’s and Fannie Mae’s Relationship With Countrywide Raises Eyes

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Haven’t we heard this song before? “You too can get into your very own home with only $1,000 down! Step right up, step right up boys and girls…”

If my memory does not deceive me that caused the mess the housing market is still in today. Yet our illustrious Federal Government is insisting this is a path for revitalizing the housing market.

It sounds too good to be true. But it is true. This offer does not come from a subprime lender, looking to reel in thousands of unqualified and ill-advised homebuyers, only to slap them with add-ons, fees and variable rates. It is not a teaser or a trick. The advertisement references a program initiated by the National Council of State Housing Agencies and Fannie Mae, the taxpayer-backed, government-sponsored enterprise that buys up mortgages from lending banks.
The pilot program is called “Affordable Advantage,” and it has now been adopted by three states — Massachusetts, Wisconsin and Idaho. (Other states, such as Pennsylvania, California and Colorado, have similar state programs.) The initiative is small, reaching just a few hundred people so far. But it is looking to expand. Given the dangers of these types of mortgages and the specter of the housing bubble, where unconventional loans wreaked disaster, it is also raising questions from wary housing experts and legislators.

As the previous article stated, this is not coming from hucksters selling teaser rates and subprime loans with huge fees. This is coming straight from our government. The ones that are supposed to be regulating industry, not leading it off the cliff.

Industry has been burned and is backing off. When the hucksters look at the government as reckless you know we have troubles.

What next, the sheriffs will turn into the drug dealers? That is what National Council of State Housing Agencies and Fannie Mae look like right now.

The supposed voices of reason are the ones seducing the unfortunate into more misery.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

New Government Program – Only a 1,000 Dollar Down Payment?

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A rumor is circulating around Washington that the Obama administration is planning on ordering Fannie Mae and Freddie Mac to forgive all of the debt of underwater mortgages.

If this is the case appraisers are going to be working overtime trying to determine the depth of debt people are in and how the estimated 800 billion dollars will be dispersed to the 15 million homeowners who are upside down on their mortgages.

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

Read the whole article at Reuters.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

Obama To Forgive Mortgage Debt For Those Underwater

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