I’m sure you’ve heard that the government is taking over Fannie Mae and Freddie Mac. We all learned during the Great Depression of how much the stability of financial markets affects us all, so I can see why they decided to step in. I just can’t help but be a little ticked off that we’re all paying for the mistakes of Fannie Mae and Freddie Mac with our tax dollars.
I know that mortgage rates will probably drop in the coming months and it’s probably gonna help our economy. Their loose lending standards got us into this mess and they haven’t done a good job of managing foreclosures in my opinion.
As a side effect of our current real estate market, I’ve dealt with a lot of short sales which could minimize losses for banks by avoiding foreclosure, but I honestly feel they’ve done a horrible job dealing with the situations.
My most recent experience with the banks involved a home seller facing foreclosure. We found a homebuyer who was willing to buy the home and the seller just needed a payoff to agree to a price. The bank had been tacking on late fees and it was impossible to calculate the fees. Well, it took the bank 2 weeks to give the sellers the payoff but by then the buyer had moved on to another home down the street. Now the sellers are forced into a foreclosure which could have been avoided if the bank provided a payoff amount in a reasonable amount of time.
I feel just awful for these sellers and frustrated with the way things are being handled by the banks. I’m hoping the government will improve things in the mortgage industry, but I’m not holding my breath. I’m a bit of Keynesian what can I say.
On the other hand, my CNBC favorite Jim Cramer of Mad Money, surprisingly thinks this bail out is a good idea. He’s a pretty smart guy and dam funny but I’ve gotta disagree.