Coeur d'Alene Press Newspaper | CDAPress.com
Local and National News - Kootenai County, Idaho
Government takeover of Fannie Mae/Freddie Mac a positive move say local experts
Special sections editor
COEUR d’ALENE — The government takeover of mortgage giants Fannie Mae and Freddie Mac last weekend did indeed result in lower mortgage interest rates.
Gabriel Hern, branch manager for Golf Savings Bank, said rates dropped an entire percentage point at first. Friday’s rate for a 30-year fixed rate loan was 5.75 percent, down from 6.5 percent right before the takeover. Hern said the rate was 5.625 percent immediately after the announcement that the federal government stepped in to potentially reverse an ailing real estate market.
“It’s still pretty aggressive,” Hern said. He added that he can foresee rates going as low as 5.25 percent.
Hern said if a consumer can drop their existing interest rate a whole percent, it’s worth it to refinance.
“If you’re planning to stay in your house awhile, if it’s a savings of $100 to $150 per month, it’s worth it,” he said.
Sandra Wach, senior partner and mortgage lender with Your Equity Source agrees with Hern, that any homeowner still sitting on an adjustable rate mortgage should take advantage of the low rates and refinance now.
“The government’s decision to step in was a positive move,” Wach said. “They’re starting to see the magnitude of the problem.”
Wach hopes this move will bring opportunities to homeowners to refinance, as well as introduce new buyers to the market. She said Kootenai County is still strong and this move should only improve things.
The federal government already owns The Department of Housing and Urban Development (HUD), initially called the Federal Housing Administration (FHA), which was established in 1934. FHA loans were designed to assist people in getting into homes with low down payments and good interest rates. Wach said FHA has a proven track record.
“I was just in Boise doing a HUD re-certification and they are doing a lot of new things,” she said. “They have new programs coming out in October that will help (with the goal of home ownership).”
Wach said the government stepping in and remaining in control of Fannie Mae and Freddie Mac is positive, but Anne Anderson, one of the owners of Lakeshore Realty, and the 2007 Realtor of the Year, hopes Fannie/Freddie will go back to being private industry when the market settles because she believes in free enterprise.
“Initially it’s going to be very good for consumers, but for these companies to be profitable they (the government) will look to these sources for additional fees,” Anderson said.
She said there is a sense of stability now with the government takeover. Anderson said this week she has had calls from Canadians coming south to look at property, but she doesn’t know if that’s a reflection of the Fannie/Freddie takeover.
“Rates are down, prices are good and there’s plenty of inventory,” Anderson said.
Hern said it will be interesting to see what happens with Fannie and Freddie when the economy improves — whether they’ll go back to being private industry or not.
He said some of the Realtors he works with have told him they have seen business pick up this past week — that the drop in the interest rate has got some buyers who have been “on the fence,” to jump off.
“It’s helped spark some business,” he said.
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cj wrote on Sep 17, 2008 1:55 PM:
control of things now. Intervention way early on would
have been much more helpful. This is desperation that
we are looking at, trying to prop up housing as an
employer. If you study what is involved in new starts
you'll get the picture that it is an assembly line for
FOREIGN made goods.
And the durable goods that fill homes after they are
purchased come with American Brand names yet they are
assembled with FOREIGN parts.
For the lucky few who can get an insurance company to
pay up, or FEMA help, their homes will be repaired or
replaced (for the most part) with FOREIGN manufactured parts and Foreign manufactured finished products. Our
output of tangible items in this country is not a very good picture. Not really, the statistical info that represents
a picture indicating positive growth is grossly misinterpreted as signs of economic steadiness. It's entirely limited to a small sector of output as compared
to the rest of this nation's endeavors. If I cite Peter Morici(Sp?) a vocal nationally known economist, he has said over and over that we have allowed the housing industry to take over as the backbone of this economy. Well even he is missing this thing about FOREIGN made stuff occupying everything that we buy here in America. I know that some of it is manufactured in very polluting environs. Why are we using such things. We do it because it's what is available and what our pocketbook can afford. An affordable decent home is a way to keep the general population thinking happy thoughts, and it keeps some of us employed. But it won't work as the sole enterprise of the economic engine here, not in the long run. The jobs are consistently being downsized, reshaped, and cheapened up which still points us to a zero end game where no one can afford anything. Not even with two full time jobs in a modest house. The numbers of people sleeping in campgrounds, emergency shelters,and in their vehicles will rise dramatically in the wake of this financial mess. Some among the the few who can qualify for housing loans will still have a wake up call when their jobs are further jeopardized by cutbacks, layoffs, and firings. At that point even landlords won't be able to cover their holdings with renter income. We need to act fast to prevent all of this from happening. Cuts in the interest rates are a drop in the bucket for what's needed. So don't get too exited. The caution flag should be frantically waving. "