I've waited a few days to talk about the Fannie Mae and Freddie Mac bailout. There are two reasons for that. First of all, I don't think we yet know what the effects are really going to be. Secondly, I'd posted when the legislation was passed in July that I was uncomfortable with the idea but didn't have a better one.

Clearly the markets told us yesterday that they think this is a swell idea. And, from their perspective you can certainly see why. Risks for investors have been reduced. Instead, risks for taxpayers have increased. (Hmmm, aren't investors also taxpayers?)

As a taxpayer, I remain skeptical about this use of my money.

As someone who makes a living in the real estate industry, it gladdened my heart to see mortgage interest rates drop a full half percent yesterday.

Long term, the model of Fannie Mae and Freddie Mac doesn't seem to have served us well. Whether some tinkering with the mechanisms can fix it or whether it needs to be scrapped completely will be debated over the next year.

The other debate will be over whether we, as a society, want to make home ownership a high priority. I suspect most are still in favor of this, even given our current difficulties. But I think a lively debate over how we allocate resources and what we believe in, is always a good thing!

An assortment of tidbits today.

Here's an interesting overall look at the Northern VA real estate market. It only comes out as far as Loudon and Prince William but you can extrapolate from there.

Bank of America appears to be set to buy Countrywide. This is good news. Countrywide appeared to be headed for bankruptcy which would have been unbelievably disruptive to the industry.

Zillow has announced that the number of homes it covers and the accuracy of it's estimates are greatly improved. You could have fooled me. When I took a look at where I live there was no Zestimate at all for our home or any of our neighbors.

This blog post if right on in pointing out that REALTORS should be the first ones objecting to NAR's absurdly rosy predictions. Credibility once lost is hard to regain.

Ben Bernanke appears set on cutting interest rates again this month. A half point cut now seems entirely possible. The effect on the mortgage interest rate remains to be seen. However, LIBOR, a rate used to set interest rates on adjustable rate mortgages fell this week. Good news if you've got an ARM due to reset soon!

So, I know you're all wondering what happened to that half point interest rate cut!

About two weeks ago now the Fed lowered the Federal Funds rate half a point. And the "Happy Days are Here Again" music immediately rang out from the real estate industry. Well, at least in some quarters you heard a lot of happy talk!

And, I thought we'd see more impact than we have. Instead what we've got are mortgage interest rates trending up. The financial markets clearly believe there's some reason to fear inflation and that fear is carrying more weight than the interest rate cuts by the Fed.

Granted, much of the Fed's cut had been factored in by the markets in advance. It's part of why the rates are still so low.

And we may yet see additional reductions as the impact of more money available to lend filters through the system.

But for now, I wouldn't hold my breath waiting for any significant impact on mortgage interest rates from Fed rate cuts. If you've been afraid to lock in a rate, I'd go ahead. I believe there's a greater risk now of interest rates going up due to inflationary pressures than that you'll miss out on a great deal on interest rates.

We have our first guest blogger today. It's Chuck Cornwell, the owner/broker at REMAX Regency in Warrenton. I'm happy to say he's my broker and always has something interesting to contribute. Here's what he's got to share with us today. Thanks for your contribution, Chuck!