OK, I think I deserve a gold star for the headline of this blog...now on to the content:
From AP, it appears that Fannie is thinking credit losses will be WORSE in 2008. That's a nice reality check (at least they're not spinning it the other direction).
Here's the critical part of this story: "Fannie said it will tighten underwriting standards and try to mitigate losses by offering more loan workouts to borrowers in trouble."
TIGHTEN UNDERWRITING STANDARDS=fewer loan approvals=fewer qualfied buyers=fewer sales=slower decrease in existing inventory=falling prices=less revenue...
I know there might be flaws or exceptions to the flow of logic above, but it's a bad news scenario either way, and those who call me a "spreader of doom and gloom" need to see reality for what it is and quit pretending (like the NAR frequently does) that everything is "fine" or "turning around".
Just my two cents for the day.
Link to article: http://money.cnn.com/2007/12/05/news/companies/bc.apfn.fanniemae.losses.ap/index.htm?postversion=2007120509
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