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I am a Licensed REALTOR dedicated to providing the highest level of service to buyers and sellers. I strive to be known by other real estate agents as a true professional and a pleasure to do business with. My mission is to treat each and every client as an individual and to always put that client's needs first. My goal is to get the job done with as little hassle as possible. I am aware that most clients want even more than just a no hassle transaction, what they really want is someone who will listen to their needs and desires. That is what I am great at! I have been an Arizona resident for over 22 years and am deeply familiar with most every area across The Valley. I specialize in servicing Mesa, Gold Canyon, Apache Junction, Gilbert, Higley, Queen Creek and Chandler. Most importantly, I am a full-time, full-service real estate professional. Our real estate market is ever-changing and working with an agent like me who is embedded in the industry on a daily basis will ensure a winning experience when buying or selling your next home.

Wednesday, September 10, 2008

Government Takeover of Fannie & Freddie

What is happening to Fannie and Freddie?

Major Points
  • Fannie and Freddie have been placed in conservatorship. (Federal government has taken 79.9 percent of common stock and all dividends in return for buying $1 billion of preferred shares.)
  • Treasury Department says both are open for business with no major changes in operations.
  • Top Fannie/Freddie executives have been replaced.
  • Fannie/Freddie can grow their guaranteed mortgage book with no limits and grow their retained portfolios with limits. Ultimately, the government plans to shrink their portfolios (10% per year starting in 2010).
  • The federal government will provide capital to keep Fannie/Freddie’s net worth positive (up to $100 billion). In return, the Treasury will receive new senior preferred stock and warrants on the GSEs’ common stock.
  • The federal government will begin buying Fannie/Freddie mortgage-backed securities (MBS) on the open market.
  • Treasury Department will create a Secured Lending Credit Facility, a liquidity backstop for GSEs.

Initial Reactions

  • Rates drop half a point!
  • World markets respond positively to news: stocks up on Monday, September 8, 2008.
  • Federal Reserve Chairman Ben Bernanke: “These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets.”
  • Investor Warren Buffett: “Secretary Paulson has made exactly the right decision for the country. He is minimizing the problem of moral hazard and maximizing the benefits for the housing market and for the smooth functioning of financial markets.”

Anticipated Results

  • Increased confidence in financial markets.
  • Rates to possibly stabilize, due to reassurance given by government intervention.
  • Loan term changes possible (FICO, LTV).
  • More loan workouts possible due to increased government pressure on lenders to create solutions that prevent foreclosures.
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