Freddie's Woe's Overstated!

By
Mortgage and Lending with Bank of England Mortgage 385907

Okay Freddie slashed it's dividend 80% or more.

GOOD MOVE!

They shouldn't be paying a dividend at this time. In the big picture the dividend cut is prudent behavior. The cut should produce an annual savings of $500 million.

Net interest income "soared," CNNMoney.com reported, to $1.5 billion from $793 million.

That's a good thing!

Here's a revelation for you, Freddie Mac is involved in the mortgage lending business and will continue to experience adjustments and losses due to foreclosures  at least for the foreseeable future. Isn't that an insightful piece of information.

BUT,

Freddie will not fail, won't happen, not now, probably not ever.

The good news;

The newest piece of legislation will provide cheaper money through the treasury, and pretty much an unlimited supply.

Also, I firmly believe that at some point in time that Freddie's stock will stabilize as well as their mortgage portfolio. The stock price will be sufficiently low enough to attract some major investor who will make an extremely large purchase. You heard it here first, or maybe you've also heard it elsewhere.

The bottom line is while they are experiencing some pain

Freddie's okay. 

  

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Rainmaker
218,087
Joan Mirantz
Homequest Real Estate - Concord, NH
Realtor, GRI, CBR, SRES - Concord New Hampshire

Are you finding a lot of Buyers in Florida are speculators? The prices are so low it would make sense...

Aug 07, 2008 09:53 AM #1
Rainmaker
288,859
Jay Beckingham
Bank of England Mortgage - Delray Beach, FL
Seniors ROCK!

Joan,

the true inevstors are back, that would be those who are well capitalized and knowledgable.

the speculators, those looking for a quick buck are not here, as you can't count on a quick profit in most cases.

jay 

Aug 08, 2008 01:35 AM #2
Ambassador
1,486,777
Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

The bad news the guarantee against failure is backed by your money, your children's money, you great grand children's money and so on.  You don't have a say in the matter.

Aug 08, 2008 01:46 AM #3
Rainmaker
288,859
Jay Beckingham
Bank of England Mortgage - Delray Beach, FL
Seniors ROCK!

Jim,

you always have a say in the matter.

these organizations were also backed by your parents money and possibly your grandparents money depending on your age.

jay

Aug 08, 2008 02:20 AM #4
Ambassador
676,358
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Thanks, Jay. I believe you're right. Both Fannie and Freddie will weather the storm!

 

Paul

Aug 09, 2008 02:38 AM #5
Rainmaker
288,859
Jay Beckingham
Bank of England Mortgage - Delray Beach, FL
Seniors ROCK!

Paul,

things are already getting better and bad loans are being replaced by quality loans.

jay

Aug 09, 2008 10:59 AM #6
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Rainmaker
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Jay Beckingham

Seniors ROCK!
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