Following our mini-exploration of NYC Fannie (FNM) and Freddie F(RE), we thought it wise to get some perspective from the opposite side of the continent.
So we talked to a longtime vet of the real estate industry in Phoenix, AZ (one of many places that’s at one point or another been described as a “ground zero” of the housing bust.
As for the housing recovery he says: “I don’t see any recovery. At all.”
Like the NYC folks we talked to he expressed frustration with Fannie and Freddie, along with Obama, and the Wall Street banks.
Here’s a bit of what we learned:
- Fannie and Freddie’s rules have been very tight, but the institutional rules put in place by the banks have also mad things tough.
- Canadians — which used to play a role in boosting the housing markets of warm weather cities — can no longer get a loan in America. They HAVE to pay cash. Even a 50% down payment isn’t enough.
- Investors can’t get loans if they own more than 10 properties. That’s even if they’re loaded and have great credit
- The only activity right now are bank-owned properties and short sales.
- The homebuilders are dead in the water.
- The tax credit was a total wa
He also had some harsh words about the effect of the mortgage modification program, noting that banks are basically taking on all comers for a mod (at first) but then kicking them off the rolls after three months. He thinks it’s because they have an incentive to list mortgage modification starts, but the only effect is that it slows down the necessary foreclosure process. (Also, it explains why mortgage mod redefault rates suck).
So there you go. The market is still a mess and the government isn’t helping.
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