Halting the Housing Crisis? Building a Foundation for Growth?
Posted in Real Estate Trends By Stefan Swanepoel, Monday, September 8, 2008.Over the weekend the Bush Government seized the housing finance giants Fannie Mae and Freddie Mac in the largest mortgage bailout in global history. These two companies have lost some $14 Billion over the past year and according to Treasury Secretary Henry Paulson, "the intervention was necessary" to save the US economy.
With this bail out the Treasury acquired $1 billion in preferred shares in each company while pledging up to another $200 billion. At the same time both Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron will be replaced and both companies will be under the conservatorship and management control of the Federal Housing Finance Agency.
INMAN News will be running a detailed news story on this incredible story later today. Meanwhile here in the Real Estate Trends Community let’s discuss some of the potential issues that could result from this announcement.
I start with some thoughts and questions:
• Will this move put a stop to the housing crisis and have we now reached the bottom?
• Will this stop the flood of foreclosures?
• Will this move reduce future costs of obtaining a mortgage and allow more people to qualify for a mortgage?
• Was Fannie and Freddie flawed? How should this model be changed for the future?
What are your thoughts? Lets blog.
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Submitted by Paula Bean on September 9, 2008 - 10:48am.
Very interesting, I can't wait to see what transpires and look forward to the article later today on Inman. I think the questions posed, albeit very good, will all be determined by how the transformation takes place and above all - accountability.
I sincerely hope this does stem the tide of foreclosures, as I've talked to many broken families, and something has to change. Hopefuly this might produce some positive change, we can only wait and see.
Paula Bean, REALTOR since 1979
e-PRO, ACRE Accredited Consultant in real estate
A Premier Class Realty Orlando, FL
office: 407-352-9678 CELL: 321-228-home(4663)
Submitted by Chuck Hormel on September 9, 2008 - 2:22pm.
I'm not sure that this is the real solution to the current mortgage problems. I do think it will give some secutity to the mortgage industry, however it is dishartening to see all taxpayers saddled with the debit from fradulent lenders and ignorant buyers. The current situation is where greed and stupidity met. My one hope is that the new government entity formed by this takeover will be realistic with new buyers and protect against fraudulent practices and at the same time not tighten up on credit to the point that buyers with less than steller credit are pushed out of the market.
Submitted by John Blogger on September 16, 2008 - 6:56am.
We are still digging the trenches. Concrete is only arriving next year. We still have a long ways to go.
John