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What's happening with the $700 billion dollar bail out?

by Ashlie DuCros

Wow, what a weekend!  Since so much has happened, I'm going to start with
the banks.  WaMu and Wachovia were heading down the same path as IndyMac
when the Federal Government stepped in and helped orchestrate a deal with
JPMorgan Chase and Citibank respectively.  These now defunked banks have had
their entire assets sold to the stronger banks, which will have no material
effect on the depositors.  WaMu's clients will now be Chase clients.  It's
another step in helping to secure the world's financial system without
needing to touch the reserves of the FDIC.  Central banks all over the world
today added another $630 Billion to the financial markets to again, add more
liquidity!

Now to the $700 Billion, or is it $150 Billion, no I think it's $250
Billion, and I guess who really knows how much it is.  One thing we do know
is that the lawmakers in Washington spent the weekend "negotiating" the
bill.  Another phrase for "negotiation" is Washington is "Adding Pork."  The
bill has been changed and so has some of the optimism of the bill getting
passed.  We shall wait and see what the bill will actually look like after
it is passed sometime on Wednesday due to the Jewish New Year Holiday
tomorrow.  Unfortunately we know right now that the bill did not pass in the House. We will have to wait and see what terms will be negotiated now! We all have been hoping for this "shot of liquidity" and hopefully once the banks start to see the flow, they'll start to loosen
their willingness to lend and then the world will be "right again."

Look for updates this week on the new bill passing and watch the volatility
in the market.  The mortgage rate right now may no longer be valid 10 minutes from
now!  As always, anything you need please do not hesitate to contact me!

NEWSFLASH!

by Ashlie DuCros

 

Fannie and Freddie: What the Bailout Means

Mortgage Rates Have Dropped & Buyers Are Buying!

The U.S. government takeover of Fannie Mae and Freddie Mac made history Sunday as they seized troubled mortgage giants Fannie Mae and Freddie Mac in a bid to help reverse a prolonged housing and credit crisis. Immediately Wall Street posted a huge rally Monday as investors reacted with enthusiasm to the government’s actions. The Dow Jones Industrial average gained nearly 300 points in the day’s trading. So, what do you know about these mortgage giants?

Think of Fannie and Freddie as hybrids. They are both government sponsored and shareholder owned. They do not have direct contact with consumers; instead, they work with lenders. The job of Fannie and Freddie is to buy mortgages from banks, savings and loans, credit unions, and other lenders to ensure that mortgage funds are consistently available. Together, they hold or guarantee about $5 trillion in home loans which is nearly half of the country’s oustanding $12 trillion in home mortgage debt.

What spurred the governement bail out?

Steep home-price declines and a rise in mortgage delinquinces and foreclosures have badly hobbled Fannie and Freddie. The two firms have registered roughly $14 billion in losses over the past year. If they had failed, the damage to the mortgage and housing markets could have a catastrophic effect on the U.S. economy, as well as, the worldwide economy.

What’s happening locally?

Homebuyers in Orange County and surrounding areas of Southern California are encountering competition when writing offers on homes that are well priced in the marketplace. This competition has boosted sales with record home sales over the last 12 months posting in August. Property inventory is shrinking and buyers are finding out the hard way that a lot of the homes listed as available are in fact off the market and under contract as the homeowner awaits lender approval for their short sale. With rates dipping lower we will see a surge of buyers into the marketplace as this will lower monthly payments and therefore increase a buyer’s purchasing power. This series of events is making owning a home increasingly more attractive!

LAST WEEK:

30 year Fixed Rate:

6.5% (APR 6.540)

Monthly Payment:

$2,275.44*

TODAY:

30 year Fixed Rate:

5.5% (APR 5.537%)

Monthly Payment:

$2,044.04*

WHAT DOES THIS MEAN TO YOU?

Monthly Savings

$231.40!

Annual Savings

$2,776.80!

Price $450,000, 20% Down

*Interest rates based on full income and asset documentation, owner occupied residences. Payment does not include home owner’s insurance or property taxes. Loan approval is not gauranteed

and is subject to verication of specic information requested at time of application. Specic rates may not be available for all borrowers. Rates are subject to change.

Real Estate Broker, California Department of Real Estate #01050210

 

Monthly Payment $2,275.00

Ashlie DuCros

Direct: 714-743-9778

Ashlie.Ducros@mailpcr.com

www.ashlieducros.com

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Ashlie DuCros & Associates
Coldwell Banker Previews Global Luxury
21580 Yorba Linda Blvd.
Yorba Linda CA 92887
714-743-9778
Fax: 714-849-5489