Government May Soon Rescue Freddie Mac and Fannie Mae, How it Affects Charlotte Real Estate

Fannie Mae and Freddie Mae Government Take Over

As expected, the Government is expected to take over Fannie Mae and Freddie Mac this weekend due to reports of billions of dollars in loss. CEO Daniel Mudd of Fannie Mae and CEO Richard Syron of Freddie Mac will be excused from their duties. There is a potential that this take over could cost taxpayers billions of dollars.

Fannie Mae's shares plunged $1.54, or 22 percent, to $5.50. Freddie Mac's shares fell $1.06, or almost 21 percent, to $4.04. Common stock in the companies will be worth little to nothing after the government's actions.

Fannie Mae and Freddie Mac Losses a Combined 3.1 Billion

Fannie Mae and Freddie Mac lost a combined $3.1 billion between April and June. Half of their credit losses came from these types of risky loans with ballooning monthly payments.

The Congressional Budget Office has stated that this intervention could cost taxpayers $25 billion dollars.

Record 9 Percent in Foreclosure

The Mortgage Bankers Association reported on Friday that more than 4 million American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June. This is a record 9 percent.

Freddie Mac and Fannie Mae together hold or guarantee $5 trillion in mortgages. This is almost half the nation's total.

On Friday, Nevada regulators shut down Silver State Bank, the 11th failure this year of a federally insured bank and let us not forget the Government takeover of investment bank Bear Stearns by JP Morgan Chase.

How it Affects Charlotte Real Estate

Expect an increase of foreclosures in the Charlotte area over the next 2-3 months. There has been some transitions in loss mitigation departments and real estate owned departments in the processing of short sales, REO contracts and outsourced REO departments. We have witnessed bulk property assignments to local Realtors.

If you would like information on "homes to watch" that are slated to be released for public sale prior to the property being entered into the public market, register here.

http://www.charlotterealestateforeclosures.com/0042EA