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Freddie Mac is in trouble!

By Patti Persia

Real Estate Appraiser with Appraising in Delaware

November 20, 2007 11:31 AM

Did you hear about the Freddie Mac third quarter loss? Go to http://biz.yahoo.com/ap/071120/earns_freddie_mac.html

What does this mean for our industry? Any insights?

Stocks for Freddie Mac our at their lowest in 14 years, down 29% according to the articles, Fannie Mae is down 25%.

I think now I am worried.

Of course in the article it also examines the decline in the number of building permits, which can only be good. We have an over supply in most markets, lets sell them before we start new. I am just concerned that our 'saving grace' the FHA/rehab type loans may be in jeopardy.

Has this happened before does anyone know?

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douglas moore

Alain Pinel Realtors - Walnut Creek, CA

Patti-

The federal government has significant interest in protecting these quasi government related entities. The rescheduling of some loans throughout the system is likely as the foreclosure rates are no longer limited to the sub prime borrowers and lenders. This action will continue to unfold over the next three to six months and there is no near term relief in sight. Having said that, it is not unprecedented for the government to step in and make some conccessions to keep the patient breathing.

We need not be in a hurry to push for resolution of some of these problems especially because we do not know yet how far reaching some of them might be.

Buckle up and hold on tight.

Nov 20, 2007 12:09 PM

Larry Wright

nwRealty.Com - Tacoma, WA

I've never heard of this happening before but I'm not that concerned. Be prepared to tighten your belt a notch or two but eventually the market will correct itself.

Nov 20, 2007 12:14 PM

Joe Adams

Major Mortgage USA/Branch Manager - Montrose, CO

What we have here is the result of the last 6 months. Earnings are down and when earnings are down dividends are not paid. Just remember Freddie and Fannie are public companies and the business they are in as been more than difficult the last 8 months. As Jimmy Buffet sings, "breathe in, breathe out, move on". This was expected and is only news because thte media keeps hammering at the mortgage crisis. The market is correcting and in a lot of places actually improving

Nov 20, 2007 12:31 PM