Fannie & Freddie holding up house prices

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Submitted by feraina on July 23, 2008 - 11:33am

This Bloomberg article basically said that Fannie & Freddie are deliberately trying to hold up house prices as much as possible, by refusing to drop prices.

http://www.bloomberg.com/apps/news?pid=2...

Freddie's houses are taking average 152 days to sell!, and this delay, by their own admission, costs an extra 10% of the value of the house through maintenance, tax, utility, loss of value, etc. But apparently they're willing to do this to forestall faster price drops and increasing foreclosures.

Fannie & Freddie are taking in foreclosures at twice the rate that they're selling. What are they waiting for? If not for the federal bail-out through the taxpayers? Surely they don't think that they will eventually lose less by insisting on the selling prices, surely they're only prolonging and deepening the pain (without a bailout)?

If foreclosure sales are 40% of the SD market, and Fannie + Freddie own almost 50% of the foreclosures, then they control almost 20% of the market, don't they? No wonder the prices aren't dropping as fast as some of us think they should!

‹ Mira Mesa... To bail or ... to bail ›
If foreclosure sales are 40%
Submitted by esmith on July 23, 2008 - 12:07pm.

If foreclosure sales are 40% of the SD market, and Fannie + Freddie own almost 50% of the foreclosures, then they control almost 20% of the market, don't they? No wonder the prices aren't dropping as fast as some of us think they should!

Fannie + Freddie may own 50% of the foreclosures in Flint MI, but definitely not in San Diego. My guess is, F+F owned foreclosures in San Diego are almost nonexistent.

With our government as our
Submitted by jficquette on July 23, 2008 - 12:20pm.

With our government as our friend who needs enemies??

John

See for
Submitted by cooprider on July 23, 2008 - 3:20pm.

See for yourself:

http://www.fanniemae.com/reoSearchApplic...

F&F remind me of the slow,
Submitted by Portlock on July 23, 2008 - 3:52pm.

F&F remind me of the slow, fat kid who, during a game of kick the can or whatever kid game you played on the street, would just sit down and declare, "I'm not playing anymore!" because he was always losing.

So F&F will just hold onto their REO properties instead of releasing them onto a depreciating market or declaring losses on properties sold for less than the original mortgage.

They're just not gonna play.

esmith, cooprider, good
Submitted by PadreBrian on July 23, 2008 - 4:42pm.

esmith, cooprider, good catch.

I can't find many Fannie Mae
Submitted by kev374 on July 23, 2008 - 4:52pm.

I can't find many Fannie Mae properties here in OC - there was 1 in Irvine and 2 in Laguna Niguel, I'm guessing there aren't any as the loan limits were only very recently increased and prior to that there was no FRE/FNM activity here in OC.

the increase in loan limits
Submitted by bob007 on July 23, 2008 - 9:24pm.

the increase in loan limits happened recently. very few homes in california were below 417k.