I think most of us agree that this real estate market is bad and getting worse... Here is more news for "Bottom" supporters. Government will be taking over Fannie Mae and Freddie Mac. More details to follow.

How will this effect our Fannie and Freddie listings if anything?

Gov't may soon back troubled mortgage finance giants Fannie Mae, Freddie Mac

WASHINGTON (AP) -- Fannie Mae and Freddie Mac are expected to be taken over by the government as soon as this weekend in a bold move designed to protect the mortgage market from the risk the companies could fail, a person briefed on the matter said Friday night.

http://biz.yahoo.com/ap/080905/mortgage_giants_crisis.html

I just thought of something... I'll be the first to reply to my own topic but, I just wrote a Cash-For Keys Check for $1,000. Wonder if Im gonna get screwed on this.

We are all screwed...

You think it terms of reimbursements? I just saw my check was cashed. Im so pissed that the first time I personally Cut a Cash-For-Keys check this happens.

The goverment will not be able to print enough money quick enough to fix this problem...Oh yea I forgot the president seems to think our economy is just fine...

They can keep printing... and our dollar can keep dropping further and further. I just want my $1,000 bucks back!!!

Im sorry...I believe you will be reembursed...Im just being a sour puss tonight...

I worry that with the Government Takeover, they will decide they can sell off their own properties and really do not need licensed agents to do so. Then all the banks will follow suit with the same justifications and be allowed to sell their own assets off as well.

I wonder if they will end up moving them through HUD.
If so I will need to brush up on my HUD procedures

I have no concerns with Fannie/Freddie reimbursements and/or moving the sales in house. These 2 have in excess of 5 trillion in assets. While they may have an extreme amount of bad loans at this point in time, it in no way undermines their long term viability. I believe the increased amount of government oversight, AKA bailout, is directed more at increasing investor confidence, both in country and overseas, rather than covering the daily cost of doing business. In actually only about 2 to 3 percent of their loans involve subprime product. These GSEs have been viewed by many investors as guaranteed by the US government rather than merely a US chartered corporation. If their stock prices are allowed to plunge due to a lack of consumer confidence it could take the US and world economy with it. Perception could become the reality. Based on my personal experience with Fannie, I've seen their turn times on reimbursements shift from 30/45 days to 15+- days. The initial 30/45 was more due to the unexpected and rapid increase in REOs and the resultant overwhelming of their accounting dept. rather than a lack of funding.
Now regarding moving the sales in house. Monitoring, selling, overseeing over 40,000 assets from a remote location would overwhelm ANY entity. Just think of the time we each spend on a given property. Now move that property 1500 miles away and handle it. Fannie in particular (I have no affiliation with Freddie), understande, respects and pays for the expertise we each contribute to the process.
I certainly don't pretend to be an economist, but I've been doing this long enough that I've learned to read the warning signs, learned to protect my interests, and perhaps the most important lesson; I've learned not to overreact to rumors.
In 15+ years of REOs I've been burnt for less than $5,000 in reimbursements. Keep in mind I carry over $350,000 in receivables.
The short version...for me it's business as usual with Fannie Mae.

I wonder how the markets will react to this. I hear a lot of people saying this isn't too big a deal... How can the biggest US Govt take over NOT be a big deal.

Weren't, within the past couple of years, the banks trying to get the law changed so they could sell real estate? And, if i recall correctly, they were defeated. Seems that they've done an end-run around the law and are moving towards getting what they want anyways.

Mortgage rates will drop, credit standards will probably tighten a bit on Freddie Mac (they are a bit looser than Fannie). I think everything else will stay the same.

Market is definitely going to jump, it did in Europe and Asia. $5 trillion in debt being backed soothes a lot of nerves.

Fannie Mae

World stocks soar on US mortgage bailout
08/09/2008 11h03

LONDON (AFP) - European and Asian stock markets surged Monday after the US government grabbed control of ailing mortgage giants Fannie Mae and Freddie Mac, easing fears of a world financial crisis, dealers said

The Paris market rocketed 476 percent and Frankfurt won 337 percent in midday trading

London's FTSE 100 index of leading shares jumped 381 percent to 5,44020 points, at which point it was suspended because of connectivity problems with some clients, a spokeswoman told AFP
The Tokyo market closed up 338 percent and Hong Kong ended with a gain of 43 percent as investors cheered Sunday's dramatic move in Washington aimed at shoring up the troubled US housing market

"There's only one story that means anything as the new trading week gets underway and that's the nationalisation of Fannie Mae and Freddie Mac that was announced by the Fed over the weekend," said CMC Markets dealer Matt Buckland

"Whilst this underlines the ongoing impact of the credit crunch, the move should take a lot of uncertainty out of the market in one quick move and at the same time stands to offer US consumers a helping hand too," added Buckland

The sudden upturn came on the heels of a worldwide slump Friday on news that US unemployment had soared to a five-year high, sparking fresh talk of a recession in the United States, the world's biggest economy
But Asia roared back on Monday, with Seoul rocketing 52 percent and Sydney finishing up 39 percent

"Markets reacted positively at first glance to the news because it dispelled uncertainty about credit and fears of a worsening housing market," said Hachijuni Bank dealer Masatsugu Miyata

Some dealers warned that the gains could be short-lived as the US bailout could further strain government finances and burden taxpayers with billions of dollars

"The fundamental problem does not lie with the mortgage businesses but with the economy and housing market that went bust," said Sumitomo Mitsui Banking Corp chief strategist Daisuke Uno

And worsening economic conditions could further devalue Freddie and Fannie securities, which would send Washington's plan up in flames, he warned

Shanghai bucked the upbeat trend across Asia on Monday, with Chinese shares sliding 268 percent

While dealers in China also welcomed the US bailout, the Asian power is beset by concerns of a domestic credit crunch as giant public offerings sap up liquidity, dealers said

On Sunday the US Treasury Department announced it would put Freddie Mac and Fannie Mae under strict federal control and may invest up to 100 billion dollars in each group

The companies have each lost about 90 percent of their value on fears of further losses from mortgage defaults by "subprime" customers, who were given loans despite patchy credit histories

The subprime crisis has ballooned into a global credit crunch, pummelling stock markets around the world since late last year

Japan's government also welcomed the bailout plan

This will remove one factor causing instability in the US economy and have a good impact on the world economy," Finance Minister Bunmei Ibuki told reporters

Ibuki said that US Treasury Secretary Henry Paulson would hold a conference call later Monday to brief his counterparts in the other Group of Seven major economies -- Britain, Canada, France, Germany, Italy and Japan

In Japan, some analysts likened the US takeover to Japan's own bailout of its banks in the late 1990s, which helped them overcome a bad loans crisis in Asia's largest economy


http://www. afp. com/english/news/stories/newsmlmmd. 34acd3ca2a1fb6c1fd418f5d49d878d9. 1e1. html

As a Fannie Mae broker what I find most distressing has been their move to outsource their REO assets to other companies who then pick the marketing broker; apparently with no regard to who does Fannie Mae work on a local level.

I first noticed this when doing a 2nd opinion interior BPO for another compnay and it became very clear that it was a Fannie Mae asset. The contact for access was a broker well over 100 miles away though I am only 30 and my prior sponsor (also a Fannie Mae broker) is about 20.

I then looked at the Fannie Mae publicly viewable web site of available properties and scrolled through all the New York listings. A few large companies stood out (including the one that provided the assigned broker I contacted to access info for the property I had just done the BPO on) as having most the properties with a relatively few still assigned directly to a local broker.

I suspect this is due to a lack of internal staff to handle the larger REO portfolio they now have. Even so it would be nice if in outsourcing the assignment they still required the use of local Fannie Mae brokers.