Fannie and Freddie to be Abolished | Mortgage Principal Balance Reductions

All who have ears listen..you need to pay attention to what is being said in this excellent CNBC  video (Below).
Know that the topics discussed in this video will have a direct effect on the real estate industry.

We need to pay very close attention to these emerging topics: Abolishing the GSE’s and Principal Mortgage Writedowns.

This video will give you a clear indication of what the government is considering. You need to ask yourself what will happen if there is a new program to reduce principal mortgage balances and if at the same time the GSE’s are abolished. (Assume that if Fannie and Freddie are killed off that rates, terms and qualification standards will be dramatically altered)

These are epic…potential rule changers for the real estate industry. Pay attention.

1. Fannie Mae and Freddie Mac are on a path of destruction. Many are calling for the GSE’s to be abolished!
2.  NOW, the GSE’s are providing 75% of all new mortgages.
3. 3 proposed options: Nationalization of the GSEs, Improved GSE structure or turn them over to the private sector.
4. Combined with FHA Fannie and Freddie ARE the mortgage market. Private banks are not lending…no GSE’s….no mortgages.
5. Get this…112 BILLION that has been spent..that will never be paid back…and they are expecting another 112 BILLION in upcoming losses! (anyone out there still think we are near bottom?)
6. Principal mortgage writedowns are gaining momentum…10% off all mortgages 25% upside down…and 25% of all mortgages 10% upside down. In the US roughly HALF of all homes are owned…no mortgage. Of the other half…35% are now upside down.

And the beat goes on….