Fannie Mae, the largest funder of U.S. home loans, and its little brother Freddie Mac just got the OK to inject up to $200 billion into the floundering mortgage market, reports Reuters.
However, I am not sure if this will benefit Orange County, since these government-sponsored buyers of loans have said the county is a ‘distressed’ market and they are requiring larger down payments on various loan types made here.
Brokers keep telling me consumers with little money to put down or less-than-stellar credit should skip Fannie & Freddie and go straight to lenders approved to make loans insured by the Federal Housing Administration, which until the end of the year can fund loans up to nearly $730,000 (as can Fannie & Freddie).
Still, the entire U.S. mortgage market is short of liquidity. Here’s more from Reuters:
The Office of Federal Housing Enterprise Oversight said it was immediately easing restrictions on Fannie Mae and Freddie Mac to give them a bigger role in settling queasy mortgage markets. It said they should be able to buy or guarantee about $2 trillion total in mortgages this year.
“All hands are on deck to try and prevent this U.S. situation from becoming a dire crisis,” said David Watt, a currency strategist with RBC Capital Markets in Toronto. “They’re doing everything they can, making policy on the fly.”
To read the full story CLICK HERE.
Yeah, families are tightening their purse strings so they can pay for gas and groceries - is this really a good time to buy a home for the middle/upper middle class? The market for $600,000-700,000 homes is strictly the upper middle class who are not exactly feeling great right now. They are going to need 20% down and $200,000 of stated income. But if they have that much income, is that still upper middle class? Unless the current price of homes drop another 20%, the upper middle class is not buying, and the upper class is not exactly waiting to move into Fountain Valley for a $600,000 home.
Sorry, prices are coming down.
Clarification: I meant to say that “the class of homes in the $600,000-700,000 range is strictly for the upper middle class.”
this would help a little. but more money will be needed to avert this crisis.
like comrade larry pinsky says:
200 trillions will really help.
But I thought Fountain Valley was “A Nice Place to Live”?
There’s some brand new homes being built in Fountain Valley by FarWestIndustries. They’re around 1 million bucks! This despite the homes next door for sale as low as 599,000!
liar loan,
INTEREST 5.13% PRICE 417,000 YEAR INS 0
YEAR 30 DOWN 133,000 YEAR TAX 5,254 MON INS 0
LOAN AMT 284,000 LOAN AMT 417,000 MON TAX 438 TOTAL 2,084
MONTHLY PMT 1,546 TAX 1.26% MON UTIL 100
NOTHING will help the mortgage and real estate crisis except time. Time for all the writedowns to hit along with the foreclosures to bottom out which are lowering home values on a daily basis. Once all this happens then prices will level off. In the mean time mortgage rates WILL continue to rise. I predict the market will turn around spring or summer of 2009, but interest rates will be high, in the 8-10% range which are not really high compared to the 17-18% they were way back when.
Lou Pacific
Real Estate and Mortgage Company Consultant
Serving OC for 30 Years
current cash flow and roi is pretty good.
i have no problem renting them at all.
fv is a nice place to live maintly because that is where the jobs are.
liar loan,
i can rent both units for below the market rate and still have positive cash flow.
the complex is managed well by the pros.
a tenant can get help in about 30 min after calling in about a problem.
chicken little-
I’m aware of the complex you bought in, across from Mile Square, because I looked there myself 2 years ago. I’d say $417k was a good price, because I recall them going for $450k when I looked. At the time, it was more risk than I wanted to take, because I had no down payment and it would have been a stretch for my family’s income.
My comment about Fountain Valley was in response to OCTrojan that Upper Class folks wouldn’t move to FV. I grew up there, so I know it’s a nice place to live.
i dont think rates will be 8-10% anytime soon,..not with the 10yr treasury at 3+%.
the agencies buying more paper will add one more source of liquidity for mortgages,..which could use anything it can get right now