Freddie Mac and Fannie Mae bill passed by the House

In a move today, which was coming for about a week or so, the House approved the new bill regarding Fannie-Mae and Freddie Mac. The bill is now being pushed to President Bush's desk by, what they are hoping, is the end of the week.

You can read the full article here:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAELTC1YJg.A&refer=home

The bill is designed so that ONLY if the two major mortgage players, Fannie Mae and Freddie Mac, begin to have "issues", then government will step in and use this bill to infuse capital and lend to the organizations. The estimated cost to the taxpayers, you and me, is roughly $25 Billion dollars.

In addition, a part of the bill would be used to help about 400,000 homeowners with sub-prime loans avoid foreclosure by being able to refinance. However, the instances of foreclosure in the U.S. is surely greater than that.

Hard to say whether the bill will have a positive impact or not. Only time will tell.

USDA Rural Housing Loan Option

The USDA Rural Housing lending program is designed to help low-income families purchase homes in outlying and rural communities. In Arizona, those communities include places in the far West and East Valley cities. This may be a great way to market those attractively priced homes and fit potential buyers with a program that will satisfy their needs.

Here are some of the benefits:

• Provide up to 102% LTV financing for existing homes or new construction based on appraised value (the extra 2% can be the financed mortgage insurance fee)
• Available to low and moderate-income rural households
  No requirement to be a "first-time" home buyer.
• Less up-front cash to close requirements than for conventionally insured or FHA loans.
• No monthly mortgage insurance required. One-time guarantee fee, payable to Rural Development at closing.
• 30 YR fixed rate loans
• No PPP

These benefits may help some homebuyers who fit this specific product. You can look up more information regarding the program and benefits at the Rural Housing website.

Good luck and don't hesitate to let me know if you have any further questions.

Three Easy Things to Discuss

Hello,

Three EASY things to talk about...Sports, Weather, and the Implosion or seemingly near implosion of Fannie and Freddie (at least that is what the media says).

Okay here goes...

Sports - Diamondbacks can't find a hole to squirm into fast enough. With all the promise of April now comes the reality of a young team teetering on the verge of collapse. They salvaged a bit of self respect last night...but it took 11 innings to beat the lowly Nationals, but without April we would be the lowly Diamondbacks. Okay so it isn't that easy to stomach.

Weather - My poor tree in the front of the house looked as though the Big Bad Wolf was standing directly next to it and blowing with all his might. Granted the tree is no bigger than my forearm in diameter but still, the wind gusts last night in Phoenix reached 50 MPH not bad for a Thursday night Monsoon. Hopefully I am smart enough to stay inside and not have my car turned into a luxury four seat boat like some other guy on the freeway last night.

Anyone keeping score because I am 0-2 when it comes to things that are EASY to talk about...

Ah yes, the impending "implosion" of Fannie and Freddie. So I was a little late to reading the WSJ yesterday (it was about 10:30 last night) when I saw the article about the difficulty these two major Mortgage players were having. Fell asleep uneasy and awoke to find that the 41% loss in FNMA stock price by 6:45AM was not a good sign.

Couple that with Indy Mac this week and well...I am 0-3.

When I call you next week...maybe I will talk about "Wipeout" - the new show on ABC. At least then we can have a good laugh at the people bouncing of those big red balls (I do laugh every time - I can't lie). At least it is an escape from the other EASY things to discuss.