That’s Not What We Meant
December 20, 2008
Post Tags: federal home loan banks , klingon empire , national association of realtors , time space continuum
Klingon Empire
I don’t think what I said is what you thought I said and it certainly isn’t what I meant. At least that’s not what I thought was going to be thought when I said it.
This is probably what is being said around the National Association of Realtors headquarters these days. The “Best laid plans of mice and men. . .” seems to apply in the current situation with a pause last week in pending contracts all across the country.
Why? Because:
In the letter to FHFA, NAR shared three potential implementation procedures for a federal buy-down plan:
- TARP would fund the payment of points at the individual level.
- The Federal Home Loan Banks would raise funds by selling below-market-rate loans to the Treasury Department for them to make the 4.5 percent interest rates available to lenders.
- Fannie Mae and Freddie Mac would purchase mortgages at the 4.5 percent interest rate but pay lenders the market rate.
The idea being this would help stimulate Buyers to enter the market as well has help some people be able to refinance and avoid foreclosure or going into short sales.
The result of the letter
“the news threw a wrench into the marketplace — making some shoppers reluctant to commit to purchase without guaranteed access to 4.5 percent mortgage money. In some cases, it stalled deals that were ready to go.” From the Arizona Daily Star- Business Section Kenneth Harney
It did appear to have a “Pausing Effect” on the number of contract being submitted by buyers, even here in Tucson.
“These are times that try men’s souls”, sorry ladies for this old quote. It is a fitting statement for the result of an intended purpose having the exact opposite effect, even if for a short period of time.
Will there be a 4.5% 30 year fixed interest rate?
I don’t know what is happening currently in the Klingon Empire but in our time space continuum, I wouldn’t expect to see that anymore than an envoy of Klingon’s landing to buy Florida Condos.
Take me to your Lender
December 20th, 2008 at 1:25 pm
Message to the NAR: When you allow and encourage prices to fall to a level that is supportable by current incomes, the home market will return to normal. You are just dragging this out over a longer period of time.
Sad that you actually have to pay dues to these people at the national level.
Chris
December 27th, 2008 at 6:13 pm
[...] I’m not talking about mobile homes. It isn’t even the fact that the best laid plans by The National Association of Realtors contributed to one of the most uneventful Novembers in housing market [...]