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A price has been put on the potential Fannie and Freddie bailout. The price tag could be as much as $25 billion. It is not a fait accompli, however. Peter R. Orszag, Director of the nonpartisan Congressional Budget Office put the odds at better than half that Fannie and Freddie will not use need any cash. Critics of the bailout maintain that homeowners should be the first to benefit from any taxpayer help. But if it is approved by congress, restoring confidence to investors in the U.S. and internationally is the bailout’s aim.  We will continue to closely watch the developments at Fannie and Freddie along with our mortgage broker and mortgage banker clients.

“Home prices in 20 major U.S. cities have dropped a record 15.3% in the past year. We are back to where we were in 2004, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s.” Yesterday’s Wall Street Journal article started a firestorm of opinion and thoughts amongst my friends and colleagues and I wanted to share it with you. While home prices are at their lowest in the last five years, market saturation is at its highest; no one is buying or selling homes.

Hello all. I’d like to piggyback on what Matt is saying by throwing a Wall Street spin on things. As mortgage professionals it is not only important for mortgage lenders to know who to contact and when regarding a mortgage, but once you have the ear of a potential loan client it is important to keep their interest, capture their trust and most importantly you want to be the one to close their loan instead of the other guy. By keeping abreast of market activity, economic data, and following the Ups and the Downs of our economy, you can be the expert instead of an order taker just throwing out rates.

In every expensive housing market in the US there are houses that have sat unsold because sellers are unwilling to drop prices from the stratospheric highs which they had been accustomed to. It’s natural psychology but if your house was valued at $3 million two years ago and is now probably worth 2/3rds what it was worth, you might be a little hesitant to take that deal (even if you are still making a good chunk in appreciation). Yet, because of the affluence of these home owners they have not been under drastic preasure to sell and have thus kept prices high, preferring to hold the property until the market rebounds. But if the downturn lasts long enough, the current market will become psychologically normalized in the minds of sellers and more houses may be listed at market prices.