Fannie, Freddie and Indy Mac rescue pushes housing aid.

The Fannie Mae/Freddie Mac problem will likely boost momentum for a quick final passage of Congress' massive housing aid bill, aimed at helping some 400,000 struggling homeowners. "I'm confident we're going to get this done," said Sen. Christopher J. Dodd. "Unfortunately, these events over the last few days have probably increased the importance of this in the minds of some."

AP News Story today that may in fact show that the Indy Mac "meltdown" and the Fannie Mae and Freddy Mac confidence issue may in fact help homeowners in mortgage trouble as it forces Congress' hand in moving legislation through that, by guaranteeing some homeonwers refi's will prop up both an ailing mortgage and housing industry AND some hurting consumers as well.

As a Realtor dealing with Short Sales and distressed property, dealing with bank loss mitigation officers AND a Mortgage Broker my exposure to these issues is perhaps sometimes through the fisheye lens but I had a very interesting discussion with a client in the banking industry (who will go unnamed!) and I asked him how far he thought this problem could go. His explanation was crystal clear and maybe a little scary. He explained that it is common knowledge that banks in the US are levergaged between 30 and 60 times their available asset base - so let's use 40X as the average. If the VALUE of the assets they are leveraged on falls just 2.5% then - they have exhausted the onhand assets! So if a particular institutions PRIMARY asset base they leverage on is HOUSING stock and we KNOW nationally and CERTAINLY here in Florida that the overall value of housing stock has fallen far more than 2.5% - the results could be VERY far reaching.

No wonder then that both parties understand the seriousness of this, no matter HOW we got here, we had better begin making sound policy decisions as regards both banking AND the housing market.

Read the full story:

http://www.floridarealtors.org/NewsAndEvents/n2-071508.cfm

- Mike W.