OfflineDetroit’s Auctions Begin with a $34,100 Sale
Detroit is beginning to auction off houses, and one open house saw more than 2,000 visitors. All bids start at $1,000. The first sale saw 88 bids and the home sold for $34,100.
Mortgage Rates Hit 2014 Low
Mortgage interest rates hit a 2014 low this week, with 30-year rates down from 4.29% to 4.21%. The 15-year rate hit 3.32%.
Pushing for Fannie Mae and Freddie Mac Wind Down
A Treasury official cites widespread support for winding down Fannie and Feddie. This is despite the fact that most of the same people see the possibility of anything happening in the Senate as remote.
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What do others say? It seems to me that doing this would really hurt the market since fanny & freddie are so embedded & dont they control like 90% of the market? I would like to hear other opinions on this.
Tony
Go faster do more! GFDM!
I believe you have a good handle on this question. Fannie has been around for decades longer than Freddie, but I believe they were both created to help commercial banks offload the mortgages they have on their books so that the commercial banks could lend more. The federal government created them, but my understanding is that they are owned by investors who would invest in them like they would in any other company. I guess the feeling among some politicians is that the taxpayers were at risk during this major housing downturn because of the quasi-public private nature of these two companies. The feeling is that Fannie and Freddie should be wound down so that the taxpayers have less exposure in the future.
In reading the Short Stories from DG Mod and other commentors on this site, wages are stuck, the millenials are moving back with Mom and Dad and not buying their first home in the current conditions. As you point out, a huge percentage of the mortgages are bought and held by Fannie and Freddie and unwinding them might take quite a bit of unwinding to actually make this happen. As I understand it, they were also very badly mismanaged at the top, as well, which may have contributed to the situation.
If Fannie and Freddie were to be unwound at the behest of politicians, would there be a need to put something in their place? They certainly have fulfilled a need in the past. Will the real estate market ever be in a bubble/fever mood like it was in 2006 and before? I don't know. This is only one of many factors, but I believe that this is one reason that the millenials are being so cautious. I certainly don't see much of a national dialog on Fannie and Freddie, and I doubt that there would be because as I mentioned these two entities have fulfilled a need in the past. With so many homes upside down all people could do is hang on and hope. So what happens to Fannie and Freddy really has not been a part of the national dialog.
Be your very best always-Judy Williamson
What you focus on is where your energy goes-Kristin
With gratitude,
Patrick