Richard Maize: Will Fannie Mae, Low Cost, Real Estate Housing Abandon The Mortgage Industry?

Feb. 20, 2011 - PRLog -- Los Angeles ..... Fannie Mae (Federal National Mortgage Association) whom is commonly referred to as government guaranteed “conforming” loans to the common borrower may be withdrawing from the mortgage business.

"President Obama’s administration feels that it is way too much of a drain of American taxpayer’s money to support this low cost real estate guarantee and continue with huge losses that they have been experiencing especially during the last 4 years," says Richard Maize.

"The government sustained about 100 billion dollars and continues to grow by the day.   Fannie Mae (and Freddie Mac (Fannie’s co part) currently is holding half of 11 trillion dollars worth of outstanding mortgages.  In many states, the conforming (Fannie Mae) is about $729,000 (this varies to the area and also is higher for units up to four)."  

"What will happen to the mortgage market without conforming loans?  Then, how does this affect the housing prices and the overall residential real estate market?," asks Richard Maize http://richardmaizerealestate.com.

"The mortgage market will be run by individual investors similar to that of “jumbo loans” (loans over the conforming limit).  The loans will be funded using banks and other institutions and either held by that specific institution (the funds from depositors) or sold by the use of mortgage back securities (bonds).  Overall the cost and interest rates are higher in the “jumbo” arena," says Maize.  

"It is also more difficult to qualify as these consumer, low cost government loans had easier underwriting guidelines for these loans (generally speaking)," says Richard Maize.

Maize adds:  "The government sponsored such loans as “first time homebuyers” programs which even makes the rate and terms much more favorable for the borrower.  Also, that program is easier to qualify on many levels than even the conventional (conforming) market.  Unless the private sector (institutional lenders) picks up the slack and follows the old conforming loans criteria, this can and likely will have another hit for the potential borrower and that of the hurting residential real estate markets."  

Richard Maize adds: "As stated above, the real estate markets in the majority of the country (outside the high end cities in California, New York, Chicago and many of the other major cities in a number of states)  will show signs of additional sluggishness when the buyers will be further diminished by difficult and costly borrowing guidelines."  

"The high end real estate properties may not feel the same direct effect providing we don’t have a domino effect by the loss of value to the houses that require a loan for about $730,000 or less,"  says Maize http://www.richardmaize.co

"Although, the Obama administration plans on removing the government backed loans in a slow methodical manner, I think this will have the market spooked and buyers may wait on the sidelines to see the effect of this action."

The Rochelle and Richard Maize Foundation http://www.richardmaizefoundation.com is a philanthropic organization that supports and contributes volunteer and financial resources to causes locally in the community and worldwide by supporting meaningful programs focusing on art, culture, family services and health care that work to help people live more fulfilling lives.

Richard Maize, a respected leader in the mortgage banking real estate industry, and a mentor to young entrepreneurs, has generously supported organizations and causes including the American Cancer Society, Vista Del Mar Child and Family Services, Hurricane Katrina, Los Angeles Police Foundation, USO, Haiti earthquake relief efforts, Israel Flying Aid, Maccabiah Jewish Olympic Games and the Cedars Sinai Board of Governors.

Richard Maize and his wife, Rochelle Maize, are longtime benefactors of many other non-profit organizations and Richard Maize has been recognized for his efforts on behalf of more than a dozen charitable groups and community projects.

The Rochelle and Richard Maize Foundation supports an extraordinary number of foundations, organizations, and non-profit groups.

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