Fannie Mae and Freddie Mac were taken over by the government yesterday, a financial bailout that will ultimately be paid for by taxpayers. The takeover was to avoid a massive failure of a private enterprise that would have far reaching, negative affects on the financial markets and the US economy. The intent is to stabilize the financial and real estate marketplace, providing financial and psychological stability to investors

What are the ramifications as real estate professionals and to our purchasers & sellers?  At present, it is uncertain.  The following is just conjecture:

-The takeover will probably stabilize the company's bonds, providing a short term rate drop or stabilization.
-The takeover will cost a lot of money.  Banks may be eventually charged more to sell loans to generate more income for the entities, thus, passing higher rates to the consumer

-The takeover will mean that loan underwriting standards may eventually change, maybe more conservatively.
-Foreclosures and workouts will most likely be more "consumer friendly"

The system is still working and money is still available.  Rates are at 2008 lows!  Stay tuned.

As always, never hesitate to contact me with any questions!

Mitchell A. Steinberg  has been involved in Residential Mortgage Banking and brokerage for over twenty one years. As Home Mortgage Consultant at Wells Fargo Home Mortgage he is  responsible for assisting clients with obtaining real estate financing for the acquisition or refinancing of residential in all 50 States.

Mr. Steinberg has been named one of the nation's top mortgage producers by Mortgage Originator magazine for 1998 and 1999 & 2000.  Wells Fargo & Company does not allow production numbers to be released due to recruitment by other institutions.  He has been named a President's Club and Leaders Club member by Wells Fargo Home Mortgage for 2007, 2006, 2005 , 2004 and 2003,  ranking in the top .01% of the company in production and closings with over 100 Million in closings each year.

Mr. Steinberg's expertise includes financing for residential homes, condominiums and cooperatives   He is a New York State certified instructor for the Westchester County Board of Realtors.  He has financed real estate in many major United States cities, including, but not limited to Miami, Washington DC, Los  Angeles, Boston and Chicago.

Wells Fargo Home Mortgage is the nation's top producer of residential mortgages.  It is New York's premier conduit for financing residences in the New York Metropolitan Area. 

Previously, Mr. Steinberg managed the National Mortgage Origination Sales Department for National Cooperative Bank, FSB.  Other positions have included Regional Mortgage Sales Manager for both Apple Bank For Savings and Emigrant Mortgage Bankers, Inc and an Account Executive for The Manhattan Mortgage Company.

NEW YORK (MarketWatch) -- At least one major U.S. bank showed signs Wednesday it's finding its way out of the woods. Wells Fargo (WFC: Wells Fargo & Company News, chart, profile, more  Last: 27.23+6.72+32.76%WFC 27.23, +6.72, +32.8%) shares rose more than 30%, their biggest daily gain since the aftermath of the 1987 market crash, as investors cheered news of the bank's better-than- expected earnings and its move to raise its dividend 10%. The company said that it earned $1.75 billion, or 53 cents a share, compared with $2.28 billion or 67 cents a share in the same period a year ago. Revenue of $11.46 billion compared with $9.89 billion a year ago. Analysts polled by Thomson Reuters had expected the bank to earn 50 cents a share on revenue of $10.65 billion. The shares closed up $6.72, or 33%, at $27.23. "Wells' good fortune is due to both external events and internal developments," said Dick Bove, a Ladenburg Thalmann analyst. "Externally, the competition has gone away. Washington Mutual is shrinking. Countrywide Financial is gone. Golden West is gone. Community bankers across the West Coast are suffering. Bank of America (BAC: BAC News,  ) is not competing as hard for mortgage business. Into this vacuum Wells has flourished because the California economy is growing," Bove said. 21st straight hike The company, one of the largest mortgage lenders in the nation, said that it's raising its quarterly dividend 10%, to 34 cents a share from 31 cents a share. That marks the 21st consecutive year that Wells Fargo has increased its payout to shareholders, according to the bank. "By raising the dividend by 10%, Wells is clearly trying to convey its confidence in its capital position to the market, which is boosting the stock this morning. While we agree its capital position is strong, we don't view this as prudent move in front of an increasingly difficult environment; plus, we believe a better use for that capital is for Wells to redeploy that capital in high-return businesses that would help its long-term outlook," Citigroup analysts wrote in a research memo. Wells Fargo largely has avoided many of the riskier mortgage products that eventually crippled competitors during the subprime-mortgage mess. Indeed, the company said it has weathered the storm by finding ways to profit even as it was forced to raise reserves. "In broad terms, the credit crisis has created incremental earnings opportunities for Wells Fargo, largely offsetting our incremental charge-offs from the crisis," Chief Financial Officer Howard Atkins said in a statement. "Year-to-date total net interest income, for example, was up $1.8 billion from the first half of 2007, roughly equal to the increase in net charge-offs for the same period." The company said its total provision for credit losses in the quarter was $3 billion, including a $1.5 billion reserve build. Average loans of $391.5 billion increased $59.6 billion, or 18% from a year ago. On a linked-quarter basis, average loans grew $7.6 billion, or 8%, the firm said. "Wells has issues but the magnitude is less than peers," Deutsche Bank analyst Mike Mayo wrote to clients. Creditworthy customers Average consumer loans increased $25.5 billion, or 13% , from second quarter 2007, but were essentially flat from the first quarter of 2008. "We're lending to creditworthy consumer and commercial customers, but continuing to exit, curtail or reprice higher risk- and lower risk-adjusted return segments," Atkins added. Second-quarter 2008 net charge-offs were $1.5 billion (1.5% of average loans, annualized) compared with $1.5 billion (1.6%) in first quarter 2008 and $720 million in second quarter 2007 (0.9%), according to Wells Fargo. The quarterly provision was $3.0 billion, which included second-quarter 2008 net charge-offs of $1.5 billion and an additional $1.5 billion credit-reserve build, primarily for expected higher losses in the National Home Equity Group and the unsecured retail-loan portfolios. Citi researchers reckoned that during the quarter about $28 billion, or 38% of the firm's $73 billion core home-equity portfolio, had a loan-to-value ratio of more than 90%. They said that was up from $22 billion, or 30% at the end of the first quarter. Several mortgage lenders have been cutting home-equity lines aggressively. During the housing boom earlier this decade, U.S. consumers borrowed against the value of their homes in record numbers. Home-equity withdrawals grew at an annual rate of $300 billion to $400 billion. Wells said that average core deposits of $318.4 billion increased $17.8 billion, or 6%. In addition, net interest income increased $1.1 billion, or 21%, from last year. Greg Morcroft is MarketWatch's financial editor in New York.

Sunday's New York Time's had a a very informative article assisting potential homebuyer's with navigating the mortgage market. The only problem is the references for most of the information were mortgage brokers, not the direct lender's themselves. The brokers may not have some available products that retail customers do have. Here are some things you and your customers need to know:

Put down the newspapers, shut off CNBC and stop the grieving,  there are a wide range of mortgage financing availability at historical low rate. 

In the past 7 years, virtually everyone could get a mortgage. Maybe the American Dream was in reach for too many people that weren't ready yet. 

There are now 3 divisision of mortgage conventional amounts for the qualified borrower (more on the word qualified later).

 In the NY Tri State Metro Area, they are:

$417,000 and under

$417,001 to $729,750

$729,750 and over

Today's rates are running at 6.00%, 0 points for the lower amount to 6.75%, 0 points for the higher level for 30 year fixed rate mortgages. Pretty low!

A qualified borrower will have to demonstrate decent credit (680 and higher), sufficient income and assets to complete the transaction and have some post closing liquidity.  If your credit scores do not meet these guidelines, you will have to pay a higher rate contingent on your score.

No income check loans are still available for credit scores of 700 + for self employed borrowers.

Most of the major banks are not offering competitive jumbo ($729,750 +) rates to the mortgage brokers. That is the reason for rate quotes in the 7 1/2% + range.

In my next discussion, I will present the basics of FHA mortgages and how they close the gap for those with lower credit scores and limited downpayments.