Breaking News: Fannie and Freddie to be Abolished | Mortgage Principal Balance Reductions
Harris Real Estate University students…you need to pay attention to what is being said in this excellent CNBC (Thanks Diana Olick) video:
Know that the topics discussed in this video will have a direct effect on our industry and your income:
You need to pay very close attention to these emerging topics: Abolishing the GSE’s and Principal Mortgage Writedowns.
This video will give you a clear indication of what the government is considering. You need to ask yourself what will happen if there is a new program to reduce principal mortgage balances and if at the same time the GSE’s are abolished. (Assume that if Fannie and Freddie are killed off that rates, terms and qualification standards will be dramatically altered).
These are epic…rule changers for our industry. Pay attention.
1) Fannie Mae and Freddie Mac are on a path of destruction. Many are calling for the GSE’s to be abolished!
2) NOW, the GSE’s are providing 75% of all new mortgages.
3) 3 proposed options: Nationalization of the GSEs, Improved GSE structure or turn them over to the private sector.
4) Combined with FHA Fannie and Freddie ARE the mortgage market. Private banks are not lending…no GSE’s….no mortgages.
5) Get this…112 BILLION that has been spent..that will never be paid back…and they are expecting another 112 BILLION in upcoming losses! (anyone out there still think we are near bottom?)
6) Principal mortgage writedowns are gaining momentum…10% off all mortgages 25% upside down…and 25% of all mortgages 10% upside down. In the US roughly HALF of all homes are owned…no mortgage. Of the other half…35% are now upside down.
Agents, if you aren’t listing and selling REOs now…what the heck are you waiting for? Watch the FREE Agent REO Secrets video and download the FREE Agent REO Secrets book NOW.
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Very interesting and serious implications for the industry in the future. We need to be aware but be careful with the message headlines. The headline makes it sound like a “done deal” when the video shows they have not figured out a way to do this yet. The private sector doesn’t have the deep pockets like the government agencies. If hey do turn it all over to the private sector you would expect interest rates to go up ‘big time’ unfortunately.