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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (1166)	12/11/2001 1:00:53 PM
From: MSI	Read Replies (1) \| Respond to of 306849

It's learned behaviour - once you own ppty for a while and see the equity, you are hooked. Real estate is the only way some people (incl. a younger me) save anything, since that equity isn't so easy to spend.

To: Tradelite who wrote (1166)	12/11/2001 9:55:58 PM
From: ild	Respond to of 306849

It may well be the opposite of what you pictured: Sellers come out but there is no buyers because of high prices and high interest rates. Result: prices will come down. I expect a new big wave of layoffs starting January. Unemployed don't buy expensive houses.

To: Tradelite who wrote (1166)	12/11/2001 10:57:33 PM
From: Spekulatius	Read Replies (1) \| Respond to of 306849

Tradelite, I have been watching this thread for quite some time. Certainly the strong price appreciation has waned lately and the number of listing has increased. I don't have a strong opinion where the RE market is going. However, i think that the decision point will be next year. I see several negative trends that could impact RE near term: 1) Potential of increasing interest rates reduce affordability 2) Worsening of potential buyers credit rating 3) Rapid increase in unemployment I plan to buy a house near term. Right now, i think the risk reward ratios is unfavorable for buying a house (at least in North CA) because I think there is a risk of a realo estate meltdown, caused by the recession. And, since you speak about next years spring season. you are of course right that prices appreciate normally during the first month - however I am not sure if this will be a normal season. And: lots of people looking for homes also means lots of people selling homes, so this may be a wash. I also don't think that there will be many corporate relocations, since the job market has grinded to a halt and people who have a job don't tend to hop around that much any more. I guess we will see by summer next year...

To: Tradelite who wrote (1166)	12/13/2001 9:45:51 AM
From: Tradelite	Respond to of 306849

Look who's claiming Fannie & Freddie won't take risky enough loans. Sheesh.... _________________ Lenders Criticize Fannie, Freddie Diversity in Funding Faulted By Kathleen Day Washington Post Staff Writer Thursday, December 13, 2001; Page E04 A group of big mortgage lenders says the nation's largest funders of home loans -- Fannie Mae and Freddie Mac -- lag behind the financial industry in providing money for mortgages to black, Hispanic and low-income borrowers. In a study released yesterday, FM Watch -- an organization whose executive committee includes J.P. Morgan Chase & Co., GE Capital, Wells Fargo & Co. and mortgage insurers -- said the records of Fannie Mae and Freddie Mac run afoul of the two companies' congressionally mandated mission of leading the market in lending to such underserved consumers. "It is clear that Fannie Mae and Freddie Mac have not fulfilled their mission of promoting home ownership among Hispanic, African-American and low- and moderate-income families," the group says in the study, which analyzed home-loan information the federal government collected from 1996 through 2000. Fannie Mae and Freddie Mac, formerly the Federal National Mortgage Association and Federal Home Loan Mortgage Corp., dispute the study's methodology and conclusions. They say the loan information collected by the government gives an inaccurate picture because it includes mortgages that the two companies by law cannot buy or that they deem too risky to buy. When those loans are removed from the data, the companies' records are what they are supposed to be, they say. "Our lending to minorities and low-income families matches the market," said Freddie Mac spokesman Douglas Robinson. "Fannie Mae stands by our record," said spokesman Chuck Greener. "We are the nation's largest single provider of mortgage financing for lower-income and minority families. This paper, rather than providing serious analysis, invents wholly new, contorted approaches in an effort to reach a critical conclusion." FM Watch, whose members do business with Fannie and Freddie in the mortgage market but also are potential competitors, disputes that. The group says the number of loans that the law prevents the two companies from buying is small. And it says many of the loans the two deem too risky are the very ones they should be seeking out. The study points out that the Department of Housing and Urban Development made the same point a year ago in a published rule, saying the loans that Fannie Mae and Freddie Mac exclude when calculating their share of home loans to minorities and other underserved markets "are important sources of lower-income credit and, in fact, are among the very loans [they] are supposed to be funding." FM Watch says in the study that Fannie Mae and Freddie Mac "manipulate" the loan data "by 'adjusting' it to exclude loans they choose not to buy. Such manipulation leads to results that support the [companies'] assertions that they lead, not lag, the market supporting affordable housing lending." A HUD spokesman said the agency had no comment about the report. Congress in 1992 directed Fannie Mae and Freddie Mac to "lead the market" in funding loans to underserved home buyers in exchange for the estimated $10.6 billion a year in tax breaks, lower borrowing costs and other benefits the two companies receive because of their ties to the federal government. Last year, HUD, which regulates Fannie Mae and Freddie Mac, concluded that the two companies had lagged in funding loans to underserved consumers and issued a rule requiring them to do more. District-based Fannie Mae and McLean-based Freddie Mac are congressionally chartered, stockholder-owned companies that buy home loans from banks and other mortgage lenders, a process that provides lenders with more cash to make loans. The study released yesterday examined the pool of home loans that were not above the amount that Fannie and Freddie are allowed to buy, and also were not government loans. The size of loans the companies are permitted to buy is set by law. This year the loans had to be below $275,000. Next year the maximum will increase to $300,700. According to the study, banks and other mortgage originators lent 4.3 percent to 4.9 percent of their mortgage money to black consumers from 1996 to 2000, compared with 2.7 percent to 3.6 percent for Fannie Mae and Freddie Mac, the study says the data from HUD shows. Mortgage originators lent 5 percent to 7 percent of their mortgage money to Hispanics during that time period, compared with 4.4 percent to 6.2 percent for the two companies, the study says. And the study says that 14.1 percent to 18.9 percent of the money that mortgage originators lent went to families with incomes below the national median, while 9.9 percent to 15.5 percent of the money Fannie Mae and Freddie Mac used to fund mortgages went to this group. © 2001 The Washington Post Company