Real Estate Blog Asheville, NC

Anyone who follows the financial markets and how they directly relate to real estate, must have been relieved by the Feds takeover of Freddie Mac and Fannie Mae.  All summer long the financial markets have had a nervous eye cocked towards the two mortgage industry giants.  As the backer of almost half the mortgage debt in the United States the collapse of these two companies would have almost certainly created a bigger hole for real estate to continue tumbling into.  Below I have attached links to pdf files which have the CNN monies stories on this topic.

fed-seizes-fannie-and-freddie

Effect of Fed Seizure on Mortgage Rates

So, what does this mean for the Asheville, NC real estate market short term?  As alluded to in the CNN money report, the short term effect could be a possible lowering of the 30 year fixed interest rates, but there’s something more important at stake.  That’s the availability of lending.  Without the two mortgage industry giants purchasing and repackaging mortgages on the secondary market, the primary lending institutions would almost cease to function because the flow of money would cease to exist.  So, the fed’s seizing control of Fannie Mae and Freddie Mac should stabilize the mortgage industry in the short term.

As of 8:00AM Monday morning that news of the fed’s move has mostly been received positively.  Markets in China and India as well as other foreign markets have all had a positive reaction to the news and have postage sharp gains.

Personally, I feel that the move by the fed was positive for the mortgage industry and the real estate markets for the simple fact that there will still be some lending available in the market.  While that lending is going to be very hard to get even for those folks with stellar credit ratings, at least there will still be some available.  On another issue, I feel it is absolute bull that the taxpayers should spend one red cent helping the CEOs and the other heads of these corporations.  These crooks, while their being replaced, are still going to walk with millions of dollars.  I personally feel that these SOB’s should be held personally accountable for benefiting from the profiteering and risk taking that they allowed their companies to orchestrate which set the stage for the collapse of the real estate market.  While this will never happen, I think it sends a pour message to the rest of corporate America that if they fail in their attempts to fleece their own pockets the U.S. taxpayer will come in for the rescue.

That’s how I feel, how do you feel?

Brian