Call me skeptical, call me jaded, just don’t call me late for dinner. I once had a girlfriend whose father must have dropped that tired little ditty a million times during the 6-years we were together. I wanted to puncture my ear drums with knitting needles every time he said it. What’s this have to do with real estate, Craig? Not a damn thing, really.
I just read the following headline on Google News; “Fannie Mae Posts Biggest Profit Since 2007.” Then I paused and waited as the needle on my internal crap-detector rose to the line that reads 100% stinky bull-shit!
You’ll recall that the US Govmt seized Fannie in 2008. Question; how does something get seized by the government when in fact the government already kind of owns it? Since the housing bubble bursted you, me and a few hundred million other tax-paying US Citizens have poured in $116 BILLION dollars (no wonder my bank account has a few less zeroes) of our hard earned money to keep the quasi-governmental agency afloat. And let’s not forget Fannie’s dysfunctional brother Freddie. If Fannie is a hopeless meth-addict selling herself on the street for her next fix, Freddie is crack-head looking for crack-crumbs in the carpet at 4AM. We also contributed an additional to $71.3 billion to Freddie. That’s $200 bill between the two. Someone call Betty Ford, these two need a 12-step program.
And you ‘ll love this, even after posting profits, both agencies came back to the well for more money! Los Angeles Times reporter Jim Puzzanghera writes, “The profit was its first since Fannie Mae reported a $73-million profit in the fourth quarter of 2010. But even then, the company needed $2.6 billion from the federal government to stay afloat and to afford the 10% quarterly dividend it must pay on its bailout.”
How does that work? Each agency posted a profit, but then went back and asked for another $3 billion. And this brings me to the real reason for today’s little rant – don’t believe everything you read or hear! The headline of the story would make you believe that all is good, that we’re turning the corner. You’re a reader of my blog so I know you are smarter. I don’t worry about you.
Tell a Friend To Get Informed
The real reason for this post; my real worry is the other 98% of Americans who get their news from The Daily Show or People Magazine. I worry about people who think that John Stewart is a real news reporter and who’d rather know more about Kim Kardashian’s 6-hour marriage then why we’ve paid $300 billion dollars of our children’s and grand-children’s money to bail-out two agencies that failed through no fault of ours. I’m worried my vote being cancelled out by someone who could regale you with every detail of last night’s episode of The Real Housewives of Atlanta, but could not tell you one thing about the pitfalls of government run healthcare. I’m worried about an electorate who think its super-cool rather than demeaning for their president; the most powerful man in the world to slow jam the news with Jimmy Falon. The approval rating for Congress has fallen to another all-time low; 13%. I’m worried about the 13% who said, “Yes!” WHO IN THE HELL ARE AMONGST THE 13%? Who are these people, where are they getting their news and will the be voting? Scary.
Get informed, people.
THE REST OF THE FANNIE STORY IS HERE
Fannie and Freddie are selling houses like Costco sells toilet paper!
With homeownership rates dropping like dresses on prom night and so many families experiencing the sting of foreclosure, rental demands are skyrocketing, which has investors pawing at the doors of homeowners with saliva dripping from their ravenous mouths. Why are investors exhibiting Cujo-like characteristics, you ask? Because the market conditions are ripe for investors to buy dozens, hundreds, and in some cases thousands of homes at huge discounts.
BUY HOUSES IN BULK
But is it a smart move to purchase so many properties and maintain such large portfolios at once? Some critics are concerned that wet-behind-the-ears companies like Waypoint (who focuses on the Bay Area and Southern California) could experience costly rookie mistakes along the way. Waypoint claims to have the technology and infrastructure to succeed, so let’s put it to the test, shall we? Waypoint’s system of algorithms, google maps, and inspector/appraiser reports, calculated a bid of $103,000 for a three-bedroom bungalow in San Bernardino. Joe Maehler, Regional Director of Waypoint’s Southern California office, investigated comparable homes that the company already owned to find that a higher bid would be justified. Plus, the home had other amenities like a pool, which would bump up the price yet again. The auctioneer kicked off the bidding at $114,750 while Maehler set the maximum bid at just over $130,000.
So they are doing drive by’s (no, not low-riders and oozies) to estimate renovation costs, based on the condition of the windows, lawn etc. Sounds pretty scientific to me…NOT!
PROPERTY MANAGEMENT SUCKS!
The company plans to buy properties, paint them, install new carpets, appliances, and fixtures, averaging costs at around $25,000. Wonder what these seasoned pro’s will do when they walk in and see mold, or lead paint? Waypoint seems to be well-intentioned and makes efforts to keep homeowners in their homes during the transition process. However, only ten percent of homeowners have actually hung around to watch the transition. Shocker.