Fannie and Freddie Funds not so COPIOUS

As we continue to promote the up to $8,000 dollar tax credit incentive the government is issuing to First Time Home Buyer (and anyone who has not owned a home in the 3 years) I began to wonder
a. How long can they keep this going until we are tapped out?

b. How is Fannie Mae and Freddie Mac holding up now that they account for a majority of the new loans being issued?

I received this email last week on just this issue (Read below). It seems they are running through the 400 billion in tax payer monies like "there is no tomorrow." And that is the way buyers who may be on the fence should consider this.
We are not sure if the incentive can/will be extended or increased through 2009/2010.
If you have questions regarding this or any other Real Estate questions, call the Realtor who truly believes in the American Dream of "The White Picket Fence"

Tayona Tate
FERRARI LUND Real Estate
690 Queen Way
Sparks, NV 89434
(775) 762-8355 or email yourpickettfence@cs.com



Fannie and Freddie Are Surviving, But Barely
Fannie Mae and Freddie Mac are surviving but at a steep price to taxpayers.
Private Banks are providing just 10% of mortgage loans down from 60% at the mid-2006 housing peak. Fannie and Freddie now account for 70% with the Federal Housing Administration (FHA) 20%.
Foreclosures will continue to rise this year putting pressure on home prices. While home sales have improved the inventory of foreclosed homes are extremely high, and will increase.
One in ten mortgages is in arrears and one in twenty-five homes are in foreclosure. Homeowners have lost 40% of their equity since mid-2006.
Fannie and Freddie are “surviving” on their $400 billion lifeline from tax payers, yet homeowners are not getting sufficient help to stay in their homes. The GSE’s are responsible for $5.2 trillion in US residential mortgage debt and have tapped their lifeline by $95.6 billion since November 2008.
Decisions need to be made on the future role of Fannie and Freddie, as the Conservatorship of the GSEs calls for their portfolios to begin to unwind in 2010. This could put additional stress on the housing market and on community and regional banks, as new sources of mortgage money need to be found, and fast.
If our banking regulators extend Conservatorship, look for the cost to taxpayers to double from the trillion dollars already spent.
Making Home Affordable Program
The US Treasury reports that only 12% of homeowners eligible for loan modifications have had mortgages reworked and millions more homeowners face foreclosures.
The Home Affordable Modification Program (HAMP) intended to reduce monthly payments to 31% of a borrower’s income is off to a slow start. Expected to help 3 to 4 million homeowners the plan will be lucky to achieve 500,000 trial modifications by November 1st. If the homeowner makes three trial payments the modification becomes permanent.
Keep in mind that Fannie and Freddie are the cornerstones to the Making Home Affordable Program, and that the program has not made a dent in the upward trend in foreclosures.