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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (41328)	11/12/2003 11:27:39 AM
From: X Y Zebra	Respond to of 74559

test sorry Jay, just using your post as a test.... (I seem to be having problems with SI)

To: TobagoJack who wrote (41328)	11/12/2003 2:57:56 PM
From: Joe S Pack	Read Replies (1) \| Respond to of 74559

Here is another mania to unfold. How do we participate? U.S. expert hails mortgage plan Dismisses concerns that home-financing system will fuel price bubble The chief of the United States' largest home-mortgage-financing agency yesterday dismissed concerns that Korea's new long-term mortgage loan system, scheduled to take effect in January, would fuel a housing price bubble. "We believe the mortgage system should encourage a steady growth of home prices, not a super-high growth," Franklin Raines, chief executive of the Federal National Mortgage Association, called Fannie Mae, said in a news meeting. The head of the world's largest non-bank financial services company made a two-day visit to Seoul beginning Tuesday to meet Korean investors holding the securities issued by his company, including the Bank of Korea and commercial lenders. His trip grabbed additional attention as the Seoul government has announced plans to establish a new agency, temporarily called the "Korea Housing Financing Corp.," with functions very similar to Fannie Mae. The state-run corporation will provide funds to the secondary-mortgage market by selling bonds and using the proceeds to buy mortgages, giving borrowers easy access to housing loans with maturities of more than 20 years. With the recent surge in home prices emerging as a major drag on the local economy, however, there have been worries that the new credit lines might attract home speculators, further jacking up real-estate prices. "Housing bubbles tend to occur when either we have a constrained supply of houses or people believe their ability to buy houses may only happen now so every one rushes to buy houses now," Raines explained. "But if you have an open ability to construct new homes and people have faith that mortgage money will be available in the future, then there will be less of a panic to buy today and therefore drive up the prices of homes more." Fannie Mae is one of America's three major mortgage-financing agencies, funding one out of four home purchases in the world's largest economy. About 33 percent of financing for the company's mortgage portfolio comes from international investors, half of them from Asia. The CEO said that in the United States, housing investment contributes to one-third of the nation's economic growth. Despite the great role mortgage financing can assume, however, there are "very few" countries in which a secondary-mortgage market has been active, he noted. "We've talked to many countries around the world about creating a mortgage corporation and very few of them have actually done it. That's why I applaud the Korean government for actually introducing legislation to do it," Raines commented. He forecast, however, that it would take considerable time for the new system to take root in Korea. "It is a process that needs to begin and then it would last over time," he stated. koreaherald.co.kr.