Freddie Mac has ordered its national network of service providers to suspend forclosures until January 9th. This “time out” is designed to get lenders implement its Streamlined Modification Program recently announced by Freddie Mac. In addition morgage interest rates have dropped to 5.5% fueling substantial refinancing.
So what does this mean for investors? I believe the best news would be the return of consumer confidence in the real estate market.
What we find so interesting in today’s market, is that there is no end to the phenomenal deals on the buy side. It is easy to go out and buy a property for $.30 – $.60 cents on the dollar. Add to that, where the rental market in many areas of the country is still strong and you have solid long term buy and hold opportunities. The only problem, is that for many investors we can’t get loans to keep buying all these great deals. So when I hope for inventories to stabilize and consumer confidence to return, what I really hope for is for Freddie and Fannie to relax their guidelines on the number of investor loans (currently you can have four loans). By allowing investors to continue to purchase excess inventory at pennies on the dollar lenders and consumers all win.
