Posted by CJ on 9/20/07 10:48pm
Msg #212363

Fannie Mae and Freddie Mac

Okay - I am an ignoramus, so you don't have to tell me all about it.

A borrower told me today that Freddie Mac and Fannie Mae have not be able to do loans for the last 6 months, but "next week", they will be loaning again.

Do you guys know anything about this? If they are loaning again, this could mean more business for us.

Reply by Becca_FL on 9/21/07 8:28am
Msg #212384

Fannie and Freddie don't "do" loans they both operate in the secondary market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. Here are the definitions from the glossary on my website to help you understand.

Fannie Mae: Federal National Mortgage Association (FNMA); a federally-chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages, Fannie Mae supplies funds that lenders may loan to potential homebuyers.

Freddie Mac: Federal Home Loan Mortgage Corporation (FHLM); a federally-chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders With funds for new homebuyers.

Reply by John_NorCal on 9/21/07 9:41am
Msg #212401

Maybe what this person was referring to was the pressure on Fannie Mae and Freddie Mac to buy loans that are in the jumbo class. The conforming limit in California is $417,000 so loans up to that limit are available as they will be bought by Fannie or Freddie. Loans over that amount are jumbo loans and those loans are pooled and sold on Wall Street to investor groups. But in any case they don't "do" loans themselves, they purchase them from originators like mortgage bankers (not brokers).

Reply by CJ on 9/21/07 10:21am
Msg #212417

No homes in my county are worth less than $417,000

. . . unless they are an outhouse. So that could be a problem. If FM & FM are only buying loans, then I guess it won't affect my business.

I do appreciate your clearing this up for me.

Reply by John_NorCal on 9/21/07 10:49am
Msg #212421

Re: No homes in my county are worth less than $417,000

That's the problem in California, unless you go way out in the boonies, I don't think you will find any homes that will meet the conforming limit threshhold. All of the major metropolitan areas have homes where the median price is at least $600,000.

Reply by janCA on 9/21/07 11:53am
Msg #212431

Re: No homes in my county are worth less than $417,000

Hey, I (as in my husband's words) resemble that statement. Ha! I live in the central valley, Visalia, where you can still buy a very nice home for $200,00 - $400,000. I don't consider this the boonies at all. We're 40 mins. from Fresno and an hour away from Bakersfield. We have the beautiful Sequoia Mnts. right in our midst, that is, when you can see them. It's that darn smog from the Bay area. It takes only 1 and a half hours to get to the coast. We have a very thriving downtown area and it only takes 15 mins to get across to the other side of town. We had a population explosion the last five years as many towns and cities in CA did. Our population doubled to right under 120,000. My point is, all of CA isn't overinflated and there are still affordable homes out there and it's not in the "boonies".

Reply by John_NorCal on 9/21/07 12:14pm
Msg #212441

Re: No homes in my county are worth less than $417,000

Mea culpa! OK so you're not in the boonies, sorry about that! I was thinking more like Red Bluff, Redding, and the little towns around the ranch that I belong to. Sorry about that Jan! Got you beat though, it only takes me 5 minutes to get to the beach!

Reply by kathy/ca on 9/21/07 12:29pm
Msg #212445

Gotcha beat John, across the street from the beach! We

couldnt afford to buy our own home today, but were lucky enough to buy it years ago when prices werent so darn ridiculous. BTW, I have still been getting calls every day to do signings, its just the fees have made it not so appealing anymore. I am in this to make money not to fill my time.

Reply by janCA on 9/21/07 12:43pm
Msg #212451

OT, That's okay, John...

Well, I have to confess, when I lived in the Bay Area, over 20 yrs. ago, and decided to move here, everyone told me this area was "the armpit" of California, but it has changed drastically. I envy you, five mins. to the coast, um' and those wineries. Ah yes, I envy you, but I love the mountains.

Reply by CJ on 9/21/07 1:45pm
Msg #212480

Okay, I will narrow that down . . .

You can't get a home anywhere near the California coast for under $417,000. As far as I know, that is anywhere in LA country, Orange County, San Diego County, Ventura County, and Santa Barbara County. But not everone here is rich either. I am also five minutes from the beach, and we get the ocean breezes. But we live in a single wide moble home that we paid $60,000. The people who sold it to us bought a REAL house out in Bakersfield, cheap. We think about moving, but we could not endure the heat of Central Valley. I am sure you can get good deals out there.

Reply by kathy/ca on 9/21/07 1:10pm
Msg #212464

Jan, I grew up in Exeter, I love that area. Family lived in

Visalia and Woodlake, & Bakersfield. You live in a beautiful area Jan!~