Delavan Real Estate & Mortgage Blog

I don’t know about you, but I’m a bit tired of our government bailing out all these investment banks.  What happened to letting the market “fix” itself.  If we are, as we profess to be, a free market society, then why in the hell is Uncle Sam constantly bailing out these failing companies?  I’ve heard the whole “if we fail to help them then there will be a run on banks and cause issues with the money supply,” argument.  But these aren’t depository banks.  These are investment banks.  Do our elected officials think we’re all a bunch of idiots?  They must.  We know the difference.  The greedy bastards that couldn’t wait to throw money at anyone with a pulse to buy a home, all in the name of better interest rate returns are now being forced to answer for their decisions.  They gambled and lost.  If I go to Las Vegas and lose at the Bellagio am I then able to call Ben Bernanke and ask for a bail out?  Actually, we’re all losing.  Isn’t AIG an insurance company?  I mean c’mon…  Am I the only one who’s had enough?  We wonder why our collective taxes keep rising.  We wonder why so many people look to the government to save their behinds.  All we have to do is look at the headlines.  Apparently, if you donate millions or billions of dollars to political parties than you move up to being “bail out” worthy.  Let the markets do their job.  Let the chips fall where they may.  Old venerable institutions like Lehman Brothers, Merrill Lynch, AIG, or any other company who chose to purchase sub-prime mortgages should reap what they sow.  You collateralize junk mortgages and never expect to pay for that then you suffer the consequences of watching the company you run vanish.  I try to teach my children that there are consequences for poor decisions.  Apparently, that’s only true if you’re not a multinational, company worth billions of dollars.  Otherwise big brother will ride in and save the day.

Travis Egan is Delavan, Wisconsin’s premier mortgage lender and looks forward to the opportunity to discuss your real estate and mortgage questions.  Please call him at (262) 740-7751. 

Originally posted: http://activerain.com/blogs/travisegan 

The Feds took over the mortgage giants, now what for homebuyers in Delavan, Lake Geneva, Elkhorn and all of Walworth County?

So the Federal government did sweep in Sunday, fired the two top people at Fannie Mae and Freddie Mac and took over control of the two. This will probably come as mixed blessings in the industry.

1)  This will shore-up the two insuring they will not implode, which is very good for the industry as a whole since it will guarantee the flow of money to banks and lenders to fund new loans.

2)  The take-over has renewed Wall Street’s awareness in mortgage bonds and because of this we’ve seen rates drop considerably over the last two days and the word on the street is they’ll drop further.  Low 5’s could be just around the corner.

3)  Shares of home improvement companies Lowes and Home Depot are up over 5% with the infusion of confidence in the real estate market.

Now the ugly news:

1)   For the short term it doesn’t look like there will be much of an adjustment in underwriting guidelines, but everyone expects them to get even more strict than they’ve become in the past few months.  This means that it may become even more difficult for some to qualify for a loan.  At a minimum it will mean that more documentation and conditions to be met before closing will be required.

2)   Shares of Fannie Mae (FNMA) and Freddie Mac (FHLMC) are down. Way, way, way down.  It’s clear investors are confident on Wall Street based on the last few days, just not with Fannie Mae and Freddie Mac.

Other than that, I think overall - if the Feds handled this correctly - this will be very good for the industry and may be what we need to get the market started again.  Lack of consumer confidence, fueled by sensationalist media, has been dealing a death blows to the industry for the past nine months.  As I’ve said before, now is as good a time to buy a home as there has been in some time.  It’s time to get off the fence and take part in the American dream.