Archives: 2007 July

The National Association of Realtors ( NAR ) website in the realtors own words is “the voice of real estate”. No doubt the NAR website does contain a great deal of information related to the US housing market and real estate market.

The website also contains articles that are of interest to anyone who is an investor or homeowner in US real estate. One article about unsavory and unwise subprime lending practices that have been carried out by some lenders is quoted below.

The subprime leading market will be in the news this year and next as many ARM loans are reset to higher interest rates. The potential is there for a severe negative impact on the entire US real estate market as well as the US economy as borrowers find themselves unable to pay the higher mortgage payments.
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WASHINGTON, June 29, 2007 - The National Association of Realtors® welcomes today’s statement issued by the federal regulators of banks, thrifts and credit unions that prescribes strong underwriting and consumer protection standards in connection with certain subprime adjustable rate mortgages (ARMs). Those mortgages can impose an unaffordable “payment shock” on borrowers when the interest rate resets. They include “2/28” mortgages that have a two-year “teaser rate” that adjusts as often as every six months based on a high margin.

Fannie Mae is a company that some would say has done its job all too well. It has helped to channel the flow of funds to low income and otherwise marginal home buyers who may not be able to repay their loans.

With the sub prime mortgage coming under increasing pressure due to non performing loans Fannie Mae has come under increased scrutiny. Now it appears that Fannie Mae “cooked the books” over the past few years in an effort to push financial problems down the road apiece.

Fannie Mae will become front page news as the coming crash in housing unfolds.

Fannie Mae was created in 1938 during the great depression, under President Franklin D. Roosevelt, at a time when millions of families could not become homeowners, or risked losing their homes, for lack of a consistent supply of mortgage funds across America.

The United States government established Fannie Mae in order to expand the flow of mortgage funds in communities and to help lower the costs to buy a home.

In 1968, Fannie Mae was rechartered by Congress as a shareholder-owned company. The funding came solely from private capital raised from investors on Wall Street and around the world.

Fannie Mae is a shareholder-owned company with a mandate to serve the public interest. Fannie Mae’s purpose is to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market.