Fannie and Freddie: The Next AIG

It's been a while since we had a good editorial cartoon about Fannie Mae and Freddie Mac. If Dodd and Frank (and any other elected officials that contributed to this mess) survive unscathed, I'll move to Barbados.

Michael Ramirez is my favorite cartoonist right now...

More Blogs on Freddie and Fannie...

More Blogs on Freddie and Fannie...

On what would you spend it?

DISCLAIMER: this is not a political blog. This is a real estate blog. Sometimes that focus broadens to include economics. Economics is unfortunately laden with politics. I hope that justifies the apparent crossover. Thanks.

The President says that tax cuts are not going to help our economy. Wow. Apparently I could have gotten into Harvard and earned a law degree because today, I am smarter than President Obama.

Let's say you earned $100,000 in 2008. On 15 April of this year you better be ready to pony up at least what... $25,000? Now, to illustrate the point, let's say that Harry Reid called you tomorrow and said, "Hey dude, just keep the $25K." What would you do? Shove it under the mattress? I bet most folks would spend all or most of it. Heck, even Dave Ramsey would spend it on a "growth stock mutual fund."

Want to know what the Odens are putting off as we wait for revenue to increase?

• $6,500 in new fencing for our cool Murphy pad
• $3,500 in Granite-type counter tops for our cool pad
• $11,000 in a new used car for J.T. to peal around the City in style
• $4,500 on a nice domestic vacation

So, there's $25,000 I'd love to pour into the local, state, and regional economy. Now, if I'm right, how much of our economic woe would that effect alone cure?

Nope... tax breaks wouldn't have any positive effect on the economy, Mr. President!! Respectfully, sir, that's a worse misunderestimation than anything Geo. Bush EVER did.

This post was inspired by this article:
Obama warns of need for stimulus bill right away



P.S. Better Ideas:
Mitt
Dave (pdf file)


FACT: Folks are still buying and selling everyday.
FACT: Lenders I work with have plenty of money left to lend.
FACT: We are in fact still in a buyers market--prices are steady to flat, inventory is respectable, but foreclosures are up.

For a foreclosure list that is updated several times an hour, go to the Powerpage on my website at www.jtoden.net

Greatest Mortgage Rates in a Generation

One of my lender buddies, Donna Hambek sent me this information about loans for buying homes in Murphy, Richardson, and Plano. She and I think this is good information to get out to everyone with regard to where rates may be going. For anyone waiting for rates to go down further, they may want to consider the commentary below.

Market Commentary from Larry Baer:

Another day – same old story. The direction of mortgage interest rates is being dictated by trading action in the stock markets. Since Friday, February 20th I have been writing in this space about a stock market plunge and the resulting support for the prospects of steady to fractionally lower mortgage interest rates it would create. In my judgment we are currently in the “sweet-spot” in terms of the amount of support mortgage interest rates can expect as a result of the swoon in global stock markets.

Before the month is over I believe the worst of the sell-off in the stock markets will have passed As you undoubtedly know, markets are made up of both buyers and sellers. No matter how strong the desire to sell or buy may be -- the transaction can not be completed without the opposing party directly participating in the transaction. The “so what” factor here is extremely important … consider this … once all the sellers have been indentified and satisfied … that only leaves one component in the market place … active and aggressive buyers … who suddenly realize they have the opportunity to acquire stocks at the low point in the market cycle. This market dynamic has never failed before … and it will not fail this time around. (My personal opinion is the stock market as indexed by the Dow will put in a low on or about March 23rd.)

Against this backdrop the Treasury department will be looking to issue a river of $2.5 trillion of debt. Without the “flight-to-quality” support of capital fleeing the volatility of the stock markets for the relative save harbor of the Treasury market – treasury yields will rise and drag mortgage interest rates higher as they go. My sincere hope is that an increasing number of your clients will come to see the greatest mortgage financing opportunity in a generation is now available.

There is an old Chinese proverb that says, “Ever banquet must come to an end.” The same can be said for cycles favoring lower mortgage interest rates.

The Real Estate Ghosts of Future, Past, and Present

Are these spooky times to you?


I guess they are to a degree. I mean, 7% unemployment is nothing to sneeze at. Some of the gray-haired friends I have in the real estate industry are starting to sound like jaded upperclassmen. You know, "We had to take our licks too, you Freshmen can't be exempt!"

What are they referring to? Well, take a look back to 1985-1990. In Texas, real estate sales were in the dumps. Dallas office buildings were largely vacant and doom and gloom was everywhere. Buyer's market? Too many days on market? Businesses folding and leaving Texas? Not good, friends. How'd that pan out?

Well, by 1995, Jim Mitchell reported that office space occupancy was like 89% in Texas! Apartment complexes were full, and even industrial occupancy was only 4% vacant. That's very healthy. But there had been about 5 years of economic uncertainty--specially in Texas. The old timers in my industry, see that the last two years in Texas real estate sales are merely a correction from a hyper-prosperous response to the pre-9/11 market. We all know that new home builders lost their stinking minds in some of the DFW suburbs and built like homeowners and their money both grew on trees! Of course we hit a more bearish market and of course profits in DFW real estate went down and inventory went up!

In other words, it was great in the mid-1990's, so folks got a little over confident, many racked up too much debt, and too many were greedy. Then, the Islamofascists swine attacked us on September the 11th, 2001 and burst the economic bubble we had enjoyed.

So where ware we? How bad are things, today? Well, find someone who owned a business in the 1970's and they'll have tales to scare you into feeling better.

Mr. Debt-Free, Dave Ramsey writes,

Yes, many people have lost their jobs and houses. You may be one of them. But
guess what? People have lost their jobs and houses even in a bull market. About 93% of people are still employed. That is pretty good! I was alive in the 1970s when unemployment hit double digits, and we’re nowhere near that right now! I’m not making light of the fact that some people are struggling; I’m just putting the situation in the proper perspective. (Read More from Dave)

I remember 1986 in Texas. My Dad's law firm represented Savings and Loans and they all died or had their DNA rewritten by the Feds to a degree that even the honest, sensible S&Ls went the way of the Dodo. I remember either me or Mom worrying that we'd starve. We didn't. In fact, my sisters graduated from $MU and since then, Mom and Dad built and sold two new houses. So, I think we made it.

Guess what? We're going to make it through this too.

If you need a reboot on your psychological, financial, occupational, and spiritual outlook on all things economic, check out my financial guru, Dave Ramsey =>: Seven action steps if you’ve lost your job (or think you might)

If you think you might lose your house, call me. And yes, I am able to do more than just sell it.

For a foreclosure list that is updated several times an hour, go to the Powerpage on my website at www.jtoden.net

Congratulations to all of us at KW!

The Battle for Texas Real Estate

Today, February 23, 1836 (a leap year), was the day the Texians barricaded themselves in the mission building and began the 13 day siege.

It still chokes me up to think about it and the outcome. I have never seen, but I am sure it exists somewhere, a "what if" history that speculates what would have happened if Bowie and Travis had obeyed the commander of the Texas Army to abandon San Antonio. All of the historians I have read say that the delay caused by the Alamo siege and attrition of the Mexican army was crucial to the organization of the Texas government and army that was in chaos when the Alamo battle began.

Tip your hat to a Mockingbird today and Remember the Alamo!

Texas Real Estate Broker License

Did you know that the only real estate designation that the general public recognizes is "Broker"?

I learned recently that Champions School of Real Estate® wants guys like me to become a Texas Real Estate Broker by obtaining our brokers license. Why? A real estate broker license is the only designation the general public recognizes and they claim it gives me instant credibility.

A 2007 National Association of REALTORS® Member Profile study shows the median gross income for real estate agents with a broker license is $39,100 more than an agent without one. It is only an additional $7.67 per week or $33.33 per month ($400 annually) to renew with the state as a broker-associate versus a salesperson.

It is now a national trend in every state. Why? All of the above reasons and then some! I'm ashamed to say that NO COLLEGE HOURS ARE REQUIRED TO BECOME A TEXAS REAL ESTATE BROKER! What? That explains a few things...

Well, I'm off to school. I hope my bottom is ready for the next two days!

Got $500,000? Move to Murphy & Plano!

Where to Live on Less Than $500,000. I mean, if you work for GM, Citibank, etc. you'll have difficulty cashing checks for much more than that. That's right, Uncle Obama has just capped your salary at $500K. So, what are your options?

Matt Woolsey, with Forbes magazine has compiled a list of cities where $500,000 will still buy an exceedingly comfortable lifestyle. Yup. Apparently it takes a guide to live comfortably on $500K. I am SO in the wrong business.

To choose these 10 locations, the gurus at Forbes examined the cost of the "typical" four-bedroom, two-bath, 2,200-square-foot home. They also factored in the amount of patent and venture capital activity, average commute, and an average cost of living below $100,000.

The top cities were:

1. Irvine, Calif.
2. Raleigh, N.C.
3. Bellevue, Wash.
4. Portland, Ore.
5. Sunnyvale, Calif.
6. Redmond, Wash.
7. Austin, Texas
8. Chandler, Ariz.
9. Rochester, N.Y.
10. Plano, Texas

So... as I've said before, it's a great time to move to Murphy!

Source: Forbes, (02/12/2009)

Good News? Can it Be True?

The News: Nationally, inventories are down which means properties are selling and the market is less stagnant. That's great news if you are trying to sell a home. Of course, here in Texas, we've been able to do that all along--but even our local buyers have lacked confidence in the real estate market. Progress!

Housing Inventories Fall in 29 Major Markets
The inventory of existing homes for sale in 29 major markets covered by ZipRealty declined an average of 2.5 percent in January 2009, compared to December 2008 and down 13 percent compared to January 2008.

This is a good sign, especially when considering that typically inventories rise in January after the holidays. In the last 25 years, the average increase in inventory in January has been 8.7 percent, according to Ivy Zelman, CEO of research firm Zelman & Associates.

Housing-market analysis Altos Research reached similar conclusions, saying that the listings in its 10-city composite index declined 3.3 percent in January compared to December 2008.

This data doesn’t include New York City, where appraisal firm Miller Samuel Inc. reports that inventories were at the highest level in the last decade, up 6 percent from December and 36 percent from January 2008.

Source: The Wall Street Journal, James Hagerty (02/10/2009)

J.T. Oden (the Real Estate Man): On what would you spend it?

J.T. Oden (the Real Estate Man): On what would you spend it?

Senator John Cornyn

For a foreclosure list that is updated several times an hour, go to the Powerpage on my website at www.jtoden.net

Going Green in Style!

See also:

Go Green for the sake of your $Green$ (2.0)

Go Green for the sake of your $Green$

For a foreclosure list that is updated several times an hour, go to the Powerpage on my website at www.jtoden.net

NAR Mourns the Loss of Habitat for Humanity Founder Millard Fuller

WASHINGTON, February 04, 2009

The following is a statement by National Association of Realtors^® President Charles McMillan:

“The National Association of Realtors^® mourns the loss of Habitat for Humanity International founder Millard Fuller, who died Tuesday, Feb. 3 at the age of 74. We extend our sincerest sympathies to his family and friends.

“Mr. Fuller’s tremendous contribution to increasing decent, affordable housing and helping more than a million individuals achieve the American dream of homeownership will live on as a tribute of his life’s work and passion.

“NAR has worked together with Habitat for Humanity for the past eight years to build a home in the host city for NAR’s annual conference and in a major city abroad. Realtors^® have also contributed to Habitat for Humanity’s post-Katrina homebuilding efforts along the Gulf Coast as well as in Southeast Asia following the 2004 tsunami.

“Although we are saddened by this news, Realtors^® look forward to continuing our work with Habitat for Humanity and helping even more families on their path to homeownership.”

Realtors® Recognize Importance of Keeping Big Banks Out of Real Estate

From My Friends at Realtor.org

WASHINGTON, February 02, 2009

Allowing large national banks to enter into real estate brokerage and property management could be devastating to the safety and security of the nation’s economy, which is why the National Association of Realtors^® has been calling for legislation that would permanently ban banks from entering into real estate transactions.

“We thank Sens. Barbara Boxer, D-Calif., and Richard Burr, R-N.C., for their leadership in introducing legislation to prevent big banks from expanding their business to act as real estate brokers and managers,” said NAR President Charles McMillan.

During the introduction of the Community Choice in Real Estate Act on Friday, Sen. Boxer said, “Permitting banks to engage in commerce could compromise their lending decisions and create conflicts of interest while restricting consumer choice and competition among mortgage lenders.”

Some national banks had petitioned the federal government for the power to own and operate local real estate brokerage or property management companies. Since 2003 language has been included in annual appropriations bills to temporarily block implementation of these actions. The Community Choice in Real Estate Act would make the prohibition permanent.

“Imagine how much worse the crisis in the financial sector and our overall economy would be if banks had been permitted to enter into commercial activities such as real estate,” McMillan said. “We hope that Congress will work quickly to close any loopholes and pass laws that maintain the separation of banking and real estate and protect our nation’s economy from unnecessary and avoidable risks.”