News came out today that Fannie Mae may slow down its purchases of mortgages from originators. This is a big headline that is getting very little attention today. Fannie Mae and Freddie Mac are the part of the home loan pipeline that has been the saving grace of the marketplace. FHA and VA loans have been keeping the market moving along since the demise of Subprime, Stated and many other Alt-A loans.
This news, if it comes to fruition, means that lending will go through another cycle of contraction and interest rates will likely increase. This in turn will bring about the need to understand and use seller financing to make real estate transactions work. Stay tuned for another post with a breakdown of the kinds of seller financing and the advantages and risks of each type.
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