FANNIE MAE/FREDDIE MAC RECOVERY

By
Real Estate Agent with Keller Williams

The stocks for Fannie Mae and Freddie Mac have been substantially depressed for years now. After the housing market collapse their establishments took a lot of the blame for the debacle. Unfounded, we all know now that the primary culprits were huge Stock Brokerage companies such as Goldman Sachs that hedged fantastic sums of money to drive the market down and thus make money on the way down.  In the meantime, Fannie Mae and Freddie Mac took the hit for them.

Are Fannie Mae and Freddie Mac poised for a strong recovery? The answer to that seems to be yes.   Housing trends are showing signs of strong stabilization. In our area alone the new housing starts are up 36 percent according to the local news. Moreover, as a Realtor here in Punta Gorda/Port Charlotte Florida I can personally attest to a definite strong change in our market. Our listing inventory is not nearly what is was and prices are nudging their way back up. I am finding it more and more difficult to find a home for my customers with less to choose from.

I don’t own stock but I do keep an eye on the Stock Market somewhat, especially if it is related to the housing market because I am a Realtor. It is interesting to see that Fannie Mae and Freddie Mac stock are being bought every day to the tune of over 2.5 million shares a day. Who is buying those stocks? I know that years ago the major retirement funds and others heavily bought and held those stocks in their portfolios. They lost a lot! But now with the worm turning are they secretly and slyly buying back in? If so, they stand a chance to gain billions of dollars as the housing market turns back upwards.

Do you think I am fooling around? Do you think I am dead wrong? Well consider this article from CBS Market Watch   http://articles.marketwatch.com/2012-08-08/markets/33091561_1_fannie-mae-freddie-mac-first-quarter

I came across this article this morning. It seems that for the second quarter, Fannie posted a profit of $5.11 billion! Net revenue rose 11% to $5.82 billion! In addition, it did not need any money from the U.S. Treasury Department and even paid $2.9 billion in senior preferred dividends. Finally, the Chief Executive Timothy J. Mayopoulos stated that he expects financial results to be “substantially  better than the past few years." Their strong recovery is vital! All ready the greed mongers are positioning themselves to buy up the stocks again.

As a Realtor, this is great news for my ears. Fannie Mae and Freddie Mac have been the backbone of the housing industry. 

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Comments (4)

Amada Slade
Island Realty of the Lowcountry - Beaufort, SC

Thank you for such an informative article.  I actually own a little Fannie stock and it has been sitting in my portfolio forever.  Glad to hear the tide is turning both for Fannie Mae and the housing market.  Slowly but surely is alway the healthiest way to drive the economy up.   

Aug 08, 2012 09:46 PM
Daniel J. Brudnok, REALTOR
Berkshire Hathaway Home Services Fox & Roach, REALTORS - Exton - PA License #RS-225179-L / Delaware License #RS-0025038 - Downingtown, PA
SRES, e-PRO,ABR,GREEN,CSP

Hi Wayne,

Seems the recovery is positive and these entities need to lead the way if it is to continue.

Aug 08, 2012 10:02 PM
David Popoff
DMK Real Estate - Darien, CT
RealtorĀ®,SRS, Green ~ Fairfield County, Ct

That is good news for real estate market, you and I as real estate agents. WSJ had an article as well last weekend....

 

http://online.wsj.com/article/SB10000872396390443545504577565322674652392.html?mod=wsj_share_tweet

 

Aug 08, 2012 10:34 PM
Wayne Goss
Keller Williams - Punta Gorda, FL
THE MYSTERY MAN

Hey Guys,

              Yep, this is music to my ears. I have been awaiting this recovery for a long time now, along with a lot of other people:)...I am thinking that as soon as the election is over and all the politics gets out of the way, that things will spike upwards.

Aug 09, 2012 09:55 PM

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