Wherefore out thou Freddie & Fannie?

By
Real Estate Broker/Owner with J. Luis Properties, Inc.

It’s taken me a few days to absorb what happened Sunday and read the articles by the ‘experts’ as to there take on the bailout of Freddie Mac and Fannie Mae. The consensus seems to be that the bailout will help stimulate the real estate market, albeit minimally. They seem to think that lower interest rates will help buyers on the fence get in the game. Although this may help, I feel their train of thought is skewed because high interest rates are not what are keeping buyers away. Affordability and tighten lending criteria are the true obstacles (As was always before the banks’ self imposed boon). Fear about decreasing property values is another important factor. The bailout does nothing to address these issues.

The only ones thrown a life preserver are the investors (like they really need it). I understand why it’s important to keep the security aspect of package mortgages relatively stable, but what’s wrong with throwing a few hundred billion to aid those on the brink of foreclosure? After all, the banks are the ones who encouraged this whole mess. They knew exactly what was going to happen-they went through it just a few years ago-SNL scandal.

The real estate market is like any other market: There are only so many customers we are all vying for and there are only so many products to sell. When one of those is out of whack you have a problem-in this case they both are out of whack, no buyers & too many homes.

Neither of these will be solved by this bailout. Worse yet we are in store for a tsunami of foreclosures just around the corner and if nothing is done we may see property values down to what they were 20 years ago or lower.

Noel Padilla

"Doing Business Right"

Kendall Short Sale Foreclosure Specialist

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Rainer
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Manolis "Manny" Sfinarolakis
Keller Williams Realty - West Hartford, CT

This is a crazy time in our history....My prediction is that a bailout of Lehman Brothers is next.

Kind Regards,

Manolis

Sep 09, 2008 04:19 AM #1
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Noel, I am a strong believer in free enterprise, free markets. The bailouts will only lead to nationalization which is only moving backwards instead of forwards. We don't need bail outs, you need to let the chips fall where they may, companies need to be responsible. What is next? The auto industry, the airline industry? The health industry? When have you EVER had a great experience at the DMV, the drivers License, court or the post office! At a time when other countries are embracing capitalism and free markets, many in our country are screaming for the government to fix everything.

Who is going to pay for it all?

So if my business needs help, can I get a government bailout? Will the taxpayers keep my small business in business? I don't think so!

Sep 12, 2008 01:03 PM #2
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Noel Padilla
J. Luis Properties, Inc. - Kendall, FL
CDPE

Amen!

I've got a few short sales they can bail out for me while they're at it!

Sep 12, 2008 01:25 PM #3
Anonymous
Anonymous
You are right. This bail out will not solve these problems. They are throwing good money at bad money as of late. I dont think the public (including most Realtors and RE agents) understand the magnitude of what is unfolding. The housing market and economy will inevitiably be crippled. I have been talking about this since the beginning of 2006 and people thought I was crazy. I warned that in the next few months, it would start will numerous mortgage co's going bust. 2 months later it happened. Then I warned in Feb. 2007 that in 6-9 months the stock market would follow. It's scary how spot on my predictions have been.
Sep 26, 2008 06:42 AM #4
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Noel Padilla

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