Friday, September 17, 2010

New Inventory Coming Soon

As the housing market moves into the second phase of its collapse, we received word today from the Wall Street Journal today that there is a new seller in town to add to the skyrocketing home inventory supply:

Fannie Mae and Freddie Mac

The two mortgage giants have taken back 191,000 homes through the first half of this year, double the total for all of 2009. 

They are also putting pressure on mortgage services to get the homes into foreclosure at a faster pace.  Why?  Because they understand that homes sold today will be worth far more than homes sold next year.

They are in a far different situation than the banks because they can take unlimited losses paid for by the tax payer.  In addition, the Wall Street Journal reports that, "when they take the homes back Fannie and Freddie must not only cover the utility bills and property taxes, but they are also relying on thousands of real-estate agents and contractors to rehabilitate homes, mow lawns and clean pools. Fannie took a $13 billion charge during the second quarter just on carrying costs for its properties."

Instead of allowing home prices to fall to market clearing prices, every tax payer in America must pay for the Fannie and Freddie losses every month in the attempt to keep home prices artificially high.

By paying these additional subsidy taxes it then allows American home owners to pay higher mortgages, property taxes, and insurance payments every month.

God Bless America.