Thursday, March 13, 2008

GSE's having trouble selling Mortgage Bonds

Scary article on CNN

Investors are now shunning mortgage-backed securities issued by government sponsored enterprises Fannie Mae and Freddie Mac, which have been critical in keeping the real estate market from completely falling apart.

There is no making this pig fly again. This is going to tank the home price market.

Got Popcorn?
Neil

5 comments:

sandman said...

This is going to tank the home price market.

I want to see how this plays out over the next 30-60 days. Obviously, lending will only get tighter. I'm interested in how quickly the tightening happens, and how much lag there is between much tighter standards and the corresponding quickening of price declines.

wannabuy said...

Sandman,

Excellent point. As to prices, I expect a continued "burn down" at a steady rate in nice areas. For McMansions in the ex-urbs... Sales to stop and prices to reset down $250k a la Corona CA.

I am curious to see what this does to spring market sales. But sellers are in denial. Its going to take a failed summer selling season to create panic. I could be wrong... but I've learned patience is key with real estate.

Got Popcorn?
Neil

Hunkston said...

Who should I get in contact with about a states own laws about mortgage broker bonds and as such, how would I get a mortgage bonds form? I life in England and am considering moving to America, don’t know where yet however I was doing some general reading about housing and came across the term mortgage broker bonds and am a little confused, is it a mortgage or a loan to acquire a mortgage?
Also if I want to set up life insurance do I need insurance bonds? Or can I simply open a policy with a company? I’m a little confused by some of the jargon. I am not moving anytime soon but thought I should be aware of things I will need to understand.

JJ said...

Can you tell me what Surety Bonds are? I have heard of Corporate Surety Bonds but I don’t understand what they are, can you help?

Seascapecapital said...

Hi,
Very informative. The Fed started having trouble unloading those mortgage bonds, and just announced plans to stop selling them for now. Mr Chris Whalen says back in April, the mortgage bond market was very different. It had a huge boost from the government, which was buying up billions in bonds as part of a plan to help the economy, and the housing market looked poised for a turnaround. Thanks it..
Mortgage Buyers