tallahasseerealestate

Have you ever noticed that anytime you read a blog, there is a Subscription Button that encourages you to subscribe to it? Well, I have been questioned about this a few times and thought I’d write a post about how and why you should subscribe to the Tallahassee Real Estate Blog.

Most people have not become comfortable with the subscription process and purpose, so this will be a simple “how and why” article to hopefully move you forward to being better organized in your reading and researching on the internet.

Blog Subscriptions Are Just Like Old Fashioned Magazine Subscriptions

Before we had the internet, the paper world used the term subscription to mean that somebody had paid for the right to receive an amount of consecutive issues of a newspaper or magazine over a period of time. So, If I subscribed to the Tallahassee Democrat, it would be delivered to me every time a new one was printed (on the schedule that I had purchased).

Blog subscriptions are no different. If you find a blog that you like, you just click on that orange button and then you are subscribed to that blog! The great benefit of subscribing to the Tallahassee Real Estate Blog is that you no longer have to check for updates, they will be delivered to you as they are published!

How Are Blog Subscriptions Delivered

The good ‘ol U.S. Mail was the delivery mechanism for paper subscriptions, but how do we receive our blog subscriptions? Well, websites publish lists of updates, called “feeds,” that indicate when new content has been posted. When you subscribe to a feed, your feed reader (explained in the next paragraph) starts monitoring that feed for updates. You don’t have to give any personal information, it doesn’t cost anything, and it’s easy to unsubscribe.

• Feed Readers - You can utilize a free web application like Google Reader to aggregate all of your favorite blogs into one easy location for viewing at your leisure. Aggregators such as this go out and check the blogs that you have identified (subscribed) and updates content since your last viewing. It saves you from having to visit your favorite blog to check for updates.
• Email Subscriptions - Most blogs offer a “Subscribe By Email” feature which will email you a copy of the latest blog post on a routine schedule. This is a very convenient way to receive the content from your favorite blogs. You only need an email application and new updates show up right in your inbox.

What Is RSS and Atom

RSS and Atom are the “languages” or formats used by the aggregators so that everyone is speaking the same language. RSS stands for “real simple syndication” and is the most often used format for blog aggregators. Fortunately, you really don’t need to know anything about this, just decide whether you would like everything sent to your email, or to a reader such as Google Reader.

How Do You Cancel Your Blog Subscription

I don’t know about you, but I get a ton of email spam these days. I used to be reluctant to subscribe to a blog thinking that  I would only be adding to the spam, but it turns out that most of these use an “opt in” subscription service.  This allows you to confirm that you want to receive the subscription and you won’t get spammed by the sender. Most blogs use a service called Aweber or one called Feedburner (and both guarantee to keep your email address private).

Subscribe To The Tallahassee Real Estate Blog

So now that you know two different ways to subscribe to the Tallahassee Real Estate Blog, you have no excuse for not being in the loop about Tallahassee housing! Subscribe to the Tallahassee Real Estate Blog  by email and don’t forget to comment often so that you can be part of the discussion!

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

Every so often I check my statistics when I’m checking for new messages on Active Rain. I am always shocked at how much activity this site has generated, especially when you consider I only created my Active Rain blog to learn about blogging and to meet the top blogging Realtors on the net.

So, in honor of breaking 400 blogs (about 16 months worth of blogging about Tallahassee real estate), I thought I would provide a list of some of my favorite posts (basically the ones that received the most views and/or most comments).

The topics for these posts, while centered on Tallahassee real estate, cover a diverse list of topics. Most are serious, but a few are tongue-in-cheek stories from my daily real estate brokerage. The funny part of all of this is that the most-trafficked blog is the one that took the least amount of time to produce (I’ll let you try to guess which one it is….I think you will figure it out with a smile).

The Best Of Tallahassee Real Estate

• What Has Happened To The 3000 Square Foot Home Values?

• Real Estate Appreciation or Depreciation - How Is It Measured?

• Quick Selling Keys In Today’s Real Estate Market

• How To Use Blog Subscriptions To Deliver Great Information To Your Inbox

• I’ve lost 74 … You?

• How To Increase Your Real Estate Traffic With Additional Back Links

• 1031 Tax Deferred Exchange: Realized Gain vs. Recognized Gain

• From Iraq To Tallahassee - A Job Well Done

• Best Counter-Offer Ever!!!!

• How To Make Market Graphs For Your Blog

• Hey ActiveRain, Are you linked in?

• Realtor Dies During Blog Training (warning, Graphic Pictures!)

• Absorption Rate - Homeowners Must Understand This

We have just posted the 19th Edition of the Real Estate Market Reports Blog Carnival. If you have not participated in the carnival, then you are missing out on a great way to drive traffic to your blog. Each week, the Real Estate Market Reports Blog Carnival gathers together localized information from real estate professionals all around the United States (and beyond). Our goal is to create a place with real information posted by real estate bloggers which is much more accurate than the consolidated MLS reports that NAR publishes.

Again, a super benefit derived from the Real Estate Market Reports Blog Carnival is addtional traffic that the bloggers receive. By posting an excerpt and link to their blogs, they have seen thousands of additional people visit their own personal blog sites.

How To Increase Traffic To Your Blog

As the title to this blog suggested, it is very easy to join a carnival and start getting traffic. After you write a new article, copy the permalink (i.e. http://activerain.com/blogsview/781368/Know-The-Basics-Of-A-1031-Tax-Deferred-Exchange) and follow these easy steps:

1. Click This Link To Visit the Blog Carnival Submission Form
2. Paste The Permalink in the “Permalink URL” box and then hit the “Tab” key
3. Enter a few quick descriptive sentences in the “Remarks” block so that readers are enticed to visit your blog
4. Enter your contact information and hit “Submit”

It really is that simple. Your article will have a link back to it with a nice descriptive paragraph that you wrote to promote yourself. Don’t be afraid to get started today!

Please swing by and Leave a Comment and Rate the Carnival!

This is the 19th of a series of blogs that are hosted at different sites each week, thus sending links back to the real estate blogging community from all over the internet. Thus far, the first 19 carnivals have been a great success and many new links back to a bunch of AR bloggers have been created.

If you missed any of the past Blog Carnivals, you can catch them here:

See How Easy It Is To Submit Your Article To The Carnival Each Week

These Bloggers are getting links back to their blogs, are you?

Check Out The Real Estate Market Reports Blog Carnival - Edition XIX

So I have a very important question to ask…

Why aren’t you joining this great way to popularize your blog?

It is not too late for you to submit your entry into the carnival. The process is rather easy.

• Write an article about what is happening in your local real estate market (or use one you’ve already written).
• Click on this link to submit your article to the Real Estate Market Reports Blog Carnival
• Paste your permalink into the appropriate box
• Write a very brief description of your story
• Submit your entry

As simple as that and you will have a new fresh link back to your blog!

This is a reminder that the September real estate reports have been posted on The Market Bulletin.

The month of September saw a continuation of the slower sales for homes in Tallahassee. Unit sales were very low for September in the Tallahassee real estate market. September is the month where all the “before school starts” buyers have just finished closing on their homes, so we normally see the market fall off from the summer pace.

Tallahassee Real Estate Market Reports

For each real estate market graph below, click on the link below it for a larger picture and a brief explanation of what the graph is revealing.

Video Explaining How To Interpret Real Estate Graphs

Just as a reminder, we have produced a short video that explains how to interpret each of these Tallahassee Real Estate Market Graphs.

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

I have a friend who has fallen on hard times, and he owns home that is (was) worth well over $1M. Like most Americans, he has the home pretty well leveraged, in fact owing much more on it that it is worth today. As you can suspect, his moral is low right now and he does not know what to do. He doesn’t want to lose his house, but he also knows his ability to make the payments on the home is coming to an end.

Creative Solutions To Home Financing

Fortunately for my friend, I have been doing quite a bit of research and reading on home finance right now. All the rules of the past 5 years have been thrown out the window and I am re-acquainting myself with traditional lending standards (you know, the kind that work….).

The first solution that I went back to requires additional collateral. Many of my clients have healthy IRAs and stock portfolios (healthy meaning a lot invested in them, not healthy as in performing well) and most  do not want to liquidate because the valuations have fallen so far.

Use Your IRA To Help Reduce Your Mortgage Balance

The first thing I ask when working with a client in this situation is whether or not they have additional collateral that they can borrow against. In the case of somebody who is trying to finance (or refinance) a multi-million dollar home, we often look to their other investments. With many people having IRA accounts, that is a great place to start looking.

It is actually possible to borrow money using an IRA as collateral, that requires interest only or even no payments. So, look at this example:

John and Jane Smith own a large home with a mortgage balance of $900K. Their business is struggling right now and they are having difficulty making the payments on their home. They would feel much more comfortable with a smaller mortgage, but they cannot sell the home right now because the mortgage balance is far higher than the home’s current value.

John and Jane have done well in the past and currently have $500,000 in their IRA accounts. While they cannot afford to take the penalties by liquidating the IRA, they discover a loan product that uses an IRA for collateral that will give them $450,000 cash with no payments (or interest-only payments) due for 7 years. Now, John and Jane can refinance their home with a loan amount under $500K, which will make them much more comfortable in these difficult times. And let’s remember these are non-recourse loans. That means that if they need to default, they can, and owe nothing but the forfeited stocks, with no negative effect on their credit rating. And if the stocks go up in value, they may ask the lender to sell enough shares to repay the loan, and recoup an upside difference as profit!

Use A Stock Portfolio To Replace A Mortgage Loan

Similar to the example above, people who have large stock portfolio’s can also raise money they need to purchase or refinance real estate. In the example above, if let’s assume that John and Jane had a stock portfolio of $2M. They do not want to liquidate their stock positions because they really think the current depressed market has driven the values to much lower than the stocks are worth. John and Jane know they just need to weather the storm and their portfolio with be worth much more again in the future.

Utilizing a Hedgeloan (a loan that uses a stock portfolio alone as collateral), John and Jane are able to borrow the entire $900K to pay off their mortgage. The new Hedgeloan requires no monthly payment! John and Jane are now having their money work for them, as opposed to them having to work for their money!

Why A Hedgeloan Works In Good Times and Bad Times

The greatest part about using a Hedgeloan is that it works for you in every future market scenario. Whether the market goes up, the market goes down, or the market stays flat, the borrower is covered:

• What if the stock market plummets? - With the turbulence that we have seen in the stock market lately, you want to use a non-recourse loan product (one that does not put your other non-secured assets at risk) that allows you to get the money you seek, without risking everything that you have. When the loan comes due, if your stocks are worth less than the loan, you can simply give the lender your stocks and the loan is satisfied! No deficiency. They took the risk and used the stocks as collateral.
• What if the stock market sky rockets? - This is a great scenario that gives the HedgeLoan borrower many options. The borrower could renew the loan, the borrower could sell some stocks and pay-off the loan, or the borrower could sell all the stocks and repay the loan plus pocket any additional cash.
• What if the stock market moves in parallel with the loan interest rate? - Again, this scenario gives the HedgeLoan borrower great options. The loan could be renewed or repaid by liquidating the portfolio.

Creative Financing Is A Mindset

This is the third article in an continuing series of articles on creative financing. The ability to “think outside the box” is really the essence of creative financing, rather than just a collection of a few loan products. Look for many more great Tallahassee Real Estate Blog articles that feature “creative financing” at the theme. Here are two previous posts that focused on facilitating real estate transactions in unconventional manners:

• Creative Home Selling - Taking A Lesson From Wall Street
• How And Why To Consider A Purchase Money Mortgage

Researching All The Hedgeloan Products

I strongly recommend that you do extensive research into the use of HedgeLoan as a potential solution to a cash or cash flow need. Of course, these loans require you to have some stock holdings…. A great web site to check stock loan hedge products can be found at HedgeLender.

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

We have been watching inventories continue to rise in the residential real estate market for a very long time,  going back to 2005. The Tallahassee Real Estate Blog has been instructing readers that the first sign of change in the housing market should be noted when inventory levels begin to fall on a long-term trend. I can say, with cautious optimism, that we are starting to see our long-term trend move to falling inventories in the Tallahassee real estate market.

Tallahassee Housing Inventory Falls On Short Term Trend

The thirty day trend is a look at what we have been seeing, on average, during the past thirty days. On average, the Tallahassee real estate market has seen more than four homes per day (NET) leave the market over the past thirty days. That means the number of homes for sale in Tallahassee is roughly 130 fewer homes today than it was at this time last month.

Long Term Trend Positive For Tallahassee Home Inventory

Just as the thirty day trend is positive, the 180 day trend is also showing a reduction of Tallahassee homes for sale. The 180 day trend is showing 2.5 fewer homes for sale in Tallahassee each day, meaning that over the past 6 months, the inventory of homes has fallen by 450 homes!

Home Selling Success Rates In Tallahassee Starting To Fall

Part of the reduction in home inventories is due to an increase in home selling success rates. The following graph measures the trend of homes sold versus homes listed for sale each day. What we are looking for is the direction of the trend line, as opposed to the absolute value at any given point.

Using the graph above, we can see the all the trends were near the upper thirties (34% - 40%) when our measurement began in mid-June of this year. Sales success rates rose up around the 45% range (meaning 45% of the homes listed were selling) by the end of August, but we are now seeing that number begin to decline.

I suspect when we observe this graph near the end of February, the trends will be in the low thirties again. Whether or not this fall is enough to turn around the inventory reduction remains to be seen. Stay tuned to the Tallahassee real estate blog for updates, or you can check our regularly updated “Market Bulletin” for charts, graphs, and analysis of the Tallahassee real estate market.

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

There is a new blog that is dedicated to local real estate information, gathered and reported by REALTORS “on the ground.” We find that these types of reports are far more accurate than those compiled at State level, where the only source of information is from MLS data gleaned from around the State.

The Eighth Edition of the Real Estate Market Reports Blog Carnival can be found at  a new location this week,   http://www.reallybetterrealestate.com .  This week’s edition brings real estate reports from California, Washington, Virginia, Florida, Tennessee and places in between.

Today’s Tallahassee real estate blog is going to be completely different than most our readers have come to expect. I will summarize a letter that I received from Jay Hill of Hill Commercial Capital, explaining in layman’s terms why the big bailout must occur. I respect Jay’s intellect and insight in the money markets and I think our readers have much to gain from his view.

There Is More Than One Type Of Bank

In order to understand the mess the credit markets are in, one must understand how the tier of banks exist in our country. They are:

• Commercial Banks - These are the large banks that work by taking deposits from consumers and converting them into loans with interest as profit plus a reward to the depositors. Such banks include Credit Suisse, Key Bank, and the Royal Bank of Canada.
• Investment Banks - These are the large “Wall Street” banks that you hear and read about in the financial news all of the time. They are banks like Goldman Sachs, Lehman Brothers, and JP Morgan. They most often work as an intermediary between buyers and sellers of stocks and bonds.
• Mortgage Banks - These are the banks that originates, sells and services mortgage loans. Such banks include Countrywide, Washington Mutual, IndyMac, and Wells Fargo.
• Local and Regional Banks - These are the commercial banks that exist more on “Main Street” than on “Wall Street.” In Tallahassee, you might know these as BB&T, FMB, Wakulla Bank, Superior Bank and Prime Meridian, to name a few. They will not be any part of the “Bailout,” but they certainly should be (as you will later see).

The Chronology Of The Banking System Failure

1. Commercial and Investment Banks urged Mortgage Banks to make home loans - The top tier of banks (the Commercial and Investment Banks) enticed the lower tier banks to generate more home loans. In some cases, they were even providing the capital for them to make the home loans.
2. Residential Mortgage Backed Securities (RMBS) were created To Send Money From Commercial and Investment Banks to Mortgage Banks - In order to facilitate greater mortgage market investment, the Commercial and Investment banks  created RMBS to broaden the range of potential investors of mortgage pools  by increasing the capital available to GNMA, FHLMC, FNMA.
3. Tranches were introduced and categorized by risk, reducing origination liability - RMBS pools together mortgages and separates them into short, medium and long term positions (called tranches). Tranches are set up to pay different rates of interest depending upon their maturity and structure.
4. Rating Agencies rated each Tranch, but based ratings on faulty logic - In order to create these tranches, rating agencies used 1990s housing data to predict loan defaults. The best quality loans (where borrower had a greater likelihood of repaying the loan) received the highest ratings, while the opposite end of the spectrum received the lowest ratings.
5. Booming Mortgage Business lead to competitive pressures creating “crazy” loans -The additional liquidity provided by RMBS created a market frenzy, introducing loans that had not previously existed. Loans requiring little or no documentation were created, as were loans with teaser rates that doubled or more after a year. As lending standards dropped to satisfy a hungrier RMBS pool, the credit ratings formula based upon 1990s default rates, was not adjusted. This means that the inevitable increase of defaults from new “junk” loans was never priced into the market.
6. Commercial and Investment Banks were also buying Commercial Mortgaged Backed Securities (CMBS) “Conduit Loans” in the commercial real estate industry. These were similar to RMBS, but lent on a much tighter lending guidelines -Ironically, the CMBS market saw little, if any, of the crazy junk loans that sprouted up in the RBMS market. Unfortunately, when the market started seeing the default rates rise in the residential mortgage market, the tremors were felt in the commercial markets.
7. Lack of Control in the Ratings and Valuation Process Create A Self-Corrupting Market - The loan ratings were not adjust to keep up with the new loan products. Higher default rates should have been incorporated into the valuation process of the newly originated loans, but instead, historical data provided by the Commercial and Investment Banks were used by the rating agencies as “sufficient” data. Jay Hill used the analogy of the students writing the test for which the teachers would grade them as an expression of how broken the credit rating system was.
8. Mortgage Banks Ignore Obvious Signs Of Trouble and continue originating new loans - Because the RMBS process created such great liquidity, Mortgage Banks continued to write new loans as fast as they could. Banks like IndyMac, Coutrywide and Washington Mutual knew they were going to sell the originated loans as quickly as they could write them, therefore lending standards were ignored. Since everybody was certain the newly written loans would be purchased, they had no fear of holding loans that they could not sell.
9. RMBS freezes, locking up the entire credit pipeline -Finally, when the losses were too staggering for the RMBS market to consume, it completely froze. The Mortgage Banks with loans to sell no longer had buyers. The liquidity from the RMBS was no longer available and banks such as Coutnrywide, Washington Mutual and IndyMac literally ran out of money.

The $700 Billion Bailout Is required to free-up capital for the commercial lines which run this country

It’s not just home mortgages that are frozen. The U.S. trades on credit. The CMBS markets have been slowed and they help finance business credit lines. The reason why this Bailout has to happen is that it is not just bad mortgage lending that is seized up… it’s also lines of credit for businesses, major manufacturers’ lines of credit that they use to operate on a daily basis, borrowing and paying up and down lines to transact business every day. On a large scale, that’s Ford Motor Company’s payroll that comes in on lines of credit to cover the individual payroll of the workers. If that market tightens any further and seizes up, it will have an unmanageable trickle-down effect to the pocket book of every individual. It’s going to seize up the ability of the major manufacturers, the major employers, to function on a day-to-day basis. Retailers use those lines of credit to buy goods from wholesalers. They buy all of their goods on credit! You see, it’s not “Bailing Out The Banks” it is “Bailing Out America.“

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

The biggest news in the real estate market over the past week has been the U.S. Treasury’s move to secure Fannie Mae and Freddie Mac. These two GSEs (Government Sponsored Enterprises) were placed under conservatorship by the Federal Housing Finance Authority (FHFA) this past weekend in order to let the market know that a restructuring, not unlike a bankruptcy proceeding, is underway at the two organizations that are pillars in the mortgage industry.

Who Is Fannie Mae and Freddie Mac

Fannie Mae, or the Federal National Mortgage Association, is one of the primary purchasers of eligible home loans from issuers. Fannie Mae securitizes these loans into mortgage-backed securities, and sells the securities to investors. Congress created Fannie Mae in 1938 to establish a secondary market for government-backed mortgages. Fannie Mae became a private company in 1968, and it is traded on the New York Stock Exchange. Fannie Mae is still federally charted with a mission to provide funding for affordable housing and is subject to oversight by the Department of Housing and Urban Development. Because of this, some people wrongly assume Fannie Mae is federally backed, and thus Fannie Mae is able to borrow at slightly lower rates. However, Fannie Mae neither receives support from nor has its securities guaranteed by the US government.

Freddie Mac, or the Federal Home Loan Mortgage Corporation (FHLMC) is a public company (NYSE:FRE) chartered by congress in 1970 to stabilize mortgage markets and expand access to home financing. Along with Fannie Mae, the Federal Home Loan Mortgage Corporation is one of the principal creators of the secondary mortgage market. Like Fannie Mae, the Federal Home Loan Mortgage Corporation buys residential mortgages from originating lenders, and securitizes pools of these mortgages for sale to investors. The securities issued by the Federal Home Loan Mortgage Corporation are not guaranteed by any government entity, but the Federal Home Loan Mortgage Corporation is subject to government oversight.

What Happened To Fannie Mae and Freddie Mac

As a result of “safety and soundness” concerns by their regulator, Freddie Mac and Fannie Mae were placed under “conservatorship” by the Federal Housing Finance Authority (FHFA) in order to restructure the organizations and to restore faith in them in the mortgage markets. While this was big news this weekend, the process of restoring the strength of these two organizations actually got underway in May of this year. As a result of the restructuring, the U.S. Treasury will provide a capital backstop for the two companies and are prepared to purchase their mortgage-backed securities, allowing the companies to continue to operate and allowing the mortgage market the continue to produce these loans.

Fannie Mae and Freddie Mac Win The Lottery

• Under New Management - Both the CEOs of Fannie Mae and Freddie Mac are being replaced. They will report to the FHFA under a unified chain of command.
• Wealthy Parents - The Treasury will have an initial investment of $1 billion in each of Fannie Mae and Freddie Mac, but has provisions to invest up to $100 billion in each “as needed” to ensure that both organizations have positive net wealth.
• Guaranteed Funding -The Treasury has agreed to become the “lender of last resort.”
• Guaranteed Buyers - The Treasury committed to begin buying an “undisclosed level” of mortgage securities this year from Fannie Mae and Freddie Mac. This program may continue through the end of next year.
• Limited Growth - Fannie Mae and Freddie Mac have agreed to limit their growth to have retained portfolios of no more than $850 billion each at the end of 2009 and then to shrink by 10% per year after that until they reach $250 billion. Fannie Mae had a retained portfolio of $758 billion at the end of July and Freddie Mac had a retained portfolio of $798 billion.

How Does This Affect The Real Estate Market

Mortgage Market Stability - With confidence in the mortgage markets returning to Fannie Mae and Freddie Mac, loan spreads should tighten and create a more robust lending market. If this occurs, it will strengthen the pool of buyers, though not to the extent that we saw in the boom years of 2005-2006. Those “wild west” days of crazy loan underwriting should be gone for quite some time.

Short Term Affect - Any time you do something to strengthen the mortgage market, you are providing liquidity that makes buying homes easier. This is good for the real estate market. Unfortunately, the mess the national housing market must deal with will not be solved purely through new capital in the lending markets. The short term affect will be slightly positive as we continue to “clean up” the post-boom foreclosures and short sales.

Long Term Affect - A most likely eventual outcome for the Fannie Mae and Freddie Mac is for Congress to develop a structure for them similar to the Federal Home Loan Banks (FHLB) that are essentially cooperatively owned by financial institution members. Similar to the FHLBs, a capital structure could be set up such that future capital needs are generated by a portion of the guarantee fee charged to lenders.

Source- Much of this blog was summarized from a report created by Keefe, Bruyette & Woods, Specialists in Financial Services and can be downloaded for a much more comprehensive study of the Fannie Mae and Freddie Mac Bailout.

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

Real Estate Market Reports Blog Carnival

Every week you can expose your blog article by submitting it to the Real Estate Market Reports Blog Carnival. That is a new link back to your story every week that you post one (or more). For consumers, the carnival is a plethora of great new real estate market reports from around the country.

The fifth edition of the Real Estate Market Reports Blog Carnival has just been posted. Each time we have assembled some of the best real estate market reports from all over the United States (and this week beyond!).

This is the fifth of a series of blogs that are hosted at different sites each week, thus sending links back to the real estate blogging community from all over the internet. Thus far, the first five carnivals have been a great success and many new links back to a bunch of AR bloggers have been created.

If you missed any of the past Blog Carnivals, you can catch them here:

See How Easy It Is To Submit Your Article To The Carnival Each Week

These Bloggers are getting links back to their blogs, are you?

• Ricardo Cortez
• Charles McDonald
• Sherry Sherpy
• Susie Blackmon
• Bill Gassett
• Troy Jowers
• David Tipton
• Charlie Ragonesi
• Bob Schwartz
• Debe Maxwell
• Mark Cijo
• Steve Mangus: Oklahoma City Real Estate
• Dave Peeples
• Raymond
• Joe Manausa
• Sherry Sim, SRES, E-Pro
• Missy Caulk
• Adam Waldman
• Joanne
• Terry Westbrook
• Bob Schwartz
• Neil Bloom
• Cindy Jones
• Renee Burrows
• Tallahassee Real Estate
• Stephen Wolfe
• Georgina M. Hunter R(S) e-Pro
• Courtney Cooper
• Todd Clark (Realtor), GRI
• Edith
• Debra Kukulski-GRI;ABR;RECS;e-PRO
• Dave Woodson
• Dena Stevens
• Tool
• Jo Soss
• Gita Bantwal

Check Out The Real Estate Market Reports Blog Carnival - Fifth Edition

So I have a very important question to ask…

Why aren’t you joining this great way to popularize your blog?

It is not too late for you to submit your entry into the carnival. The process is rather easy.

• Write an article about what is happening in your local real estate market (or use one you’ve already written).
• Click on this link to submit your article to the Real Estate Market Reports Blog Carnival
• Paste your permalink into the appropriate box
• Write a very brief description of your story
• Submit your entry

As simple as that and you will have a new fresh link back to your blog!