Monday, August 18, 2008

Fannie and Freddie Get Hammered

Lenders continue to tighten and no one really knows how long that trend will last. Just today, Fannie Mae and Freddie Mac are getting punished on Wall Street since Treasury secretary Hank Paulson said that the government would not serve as a backstop for the GSEs. However, an article in Barron's over the weekend suggested that the Treasury may have no other choice.

A government bailout would likely wash away shareholder equity in the companies. And the future doesn't look promising. I recently spoke with a large REO listing agent who said that Fannie Mae expects an increase in foreclosures in 2009.

Real Estate Investing

Well, I'm getting ready to jump back in the market. I'm very excited - now that I'm a licensed realtor. I expect to have more control and all important direct access to listing agents, especially on the REO side of the business. My goal is to continue to expand relationships with REO listing agents and to find my clients great deals - whether it's a primary residence or an investment property.

I think that like all businesses, real estate is a relationship business. I'm fortunate to have a broker who lists REOs, and to have good relationships with a couple of other REO listing agents. My goal is to continue to expand relationships with REO listing agents and to help guide individual investors so that they don't make some of the same mistakes I made as a beginning real estate investor.