The slaughter of Fannie Mae and Freddie Mac continues in the stock market, and President George W. Bush is going exactly the wrong way with his response.
At a press conference, the President began implying a willingness to step in and support Fannie & Freddie instead of allowing the problems to work themselves out naturally.
Bad move, Bush. It’s like financing a house of cards with a subprime mortgage. In the end, the free market solves problems better than government interference ever could.
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Few industries are as profoundly impacted by the political machinations in Washington as the real estate industry. Whether it's old legislation like Jimmy Carter's Community Reinvestment Act or Barack Obama's massive mortgage bailouts, the U.S. political machine has a huge impact (usually bad) on the business of real estate.
Ideally, we could ignore politics. But here at the Bryan Ellis Real Estate Letter, we insist on seeing the world with clarity - including the reality of Washington's aggressive involvement in every facet of our business, from mortgage lending to real estate sales license; from loan modification regulations to appraisal requirements... every piece of our business is profoundly impacted by politics. So rather than stick our heads in the sand and ignore reality, readers of the Bryan Ellis Real Estate Letter choose to be informed and prepared.
Few things change more rapidly than the mortgage market, and with the increasing dominance of GSE's Fannie Mae and Freddie Mac over the mortgage business, it's more important than ever to keep up. Here are a few recent mortgage news updates:
Bryan Ellis is an Atlanta-based real estate analyst and publisher of the widely read newsletter "The Bryan Ellis Real Estate Letter". With over 200,000 subscribers - including real estate investors, agents, brokers, appraisers and other real estate professionals - the Bryan Ellis Real Estate Letter is among America's largest sources of unbiased coverage of politics and public policy for the real estate industry.
Bryan Ellis serves as editor in chief for the Bryan Ellis Real Estate Letter and is assisted by an extraordinary staff of writers, researchers and editors who are each real estate experts in their own right and who assure that the news we report is well researched, factual, and highly relevant to today's real estate industry.
Bryan is very happily married and has two wonderful daughters. He makes his home in the suburbs of Atlanta, Georgia. You can contact the team at the Bryan Ellis Real Estate Letter here.
Once again, you are right on the mark. Unfortunately, this is just another clue that we are no longer a republic. No longer a government run by the people. No longer are we represented by an the “elected”. We have a chance to throw all the bums out across both lines. This is our only hope with regards to true change. Vote for the non-incumbent ! Throw the bums out and let the market work itself out. Otherwise, what did we sacrifice everything to stop the fascist Nazis and the socialistic pro literate for?
Normally I would agree… the less government involvement, the better. Unfortunately, at this time, however… if Fannie or Freddie were to fail this country would go into a financial tailspin. Just think of how hard it is now for so many to get a mortgage. Take fannie and Freddie out of the picture and what’s left? FHA and Jumbo lenders. Immediately we would see rates of non FHA loan jump to 7% or higher. No one would get a 95% loan… 10% down would be the absolute minimum. And even that could go away. So with millions of pre-foreclosures and millions of people that would just like to sell, more than 50% of the buying public could be taken out of the market. What would that do to values? One thing that people need to remember is that a very large reason for the value of real estate is the ability to access mortgage funds. Take that away and we’ll all be on the Titanic just after it kissed an iceberg.