F & F to purchase $200 billion in mortgage debt?

[Gobears81]

https://finance.yahoo.com/news/trump-directs-200-billion-mortgage-220838602.html

Curious of thoughts here?

On the RE appraisal side, this would seemingly cause a bump in refinancing activity, so if that happens, 2026 should be a busier year for appraisers.

 

[J Grant]

https://finance.yahoo.com/news/trump-directs-200-billion-mortgage-220838602.html

Curious of thoughts here?

On the RE appraisal side, this would seemingly cause a bump in refinancing activity, so if that happens, 2026 should be a busier year for appraisers.

I doubt Fannie will use appraisals for this even if it happens. Though I suppose if Trump orders it FF better do it ASAP or risk getting rounded up and deported to Venezuela. Then again, we won't miss them if that happens.

If FF buys the debt, how does that translate into invdiduals ownerfs refinancing?

If interest rates go down, that affects refis.

 

[alebrewer]

Citigroup says that a $250B increase in MBS portfolio by the GSE's should result in a drop of ~ .25 basis points. Not huge, but not trivial either...

 

[BRCJR]

I doubt Fannie will use appraisals for this even if it happens. Though I suppose if Trump orders it FF better do it ASAP or risk getting rounded up and deported to Venezuela. Then again, we won't miss them if that happens.

If FF buys the debt, how does that translate into invdiduals ownerfs refinancing?

If interest rates go down, that affects refis.

I think you are addicted to making a Trump comment even when lacking relevance. Do you agree?

 

[TerryRohrer]

Another in an increasing chain of stupid ideas that will cost taxpayers while degrading the economy and increasing home prices in the long run, but maybe buy
midterm votes. This is simply more stupid stimulus without any merit whatsoever, for reasons that are not being admitted.

 

[Mark K]

....that will cost taxpayers while degrading the economy and increasing home prices in the long run, ....

Please explain your reasoning for this. I'm thinking mostly the opposite. Cost the taxpayers? How? Degrade the economy? Again, why? Increase home prices? If a potential 1/4 point interest drop increases home prices it will also help a lot of people buy homes. Kind of a wash IMO. People that buy houses also buy new carpet, appliances, cabinets, etc.

 

[TerryRohrer]

Please explain your reasoning for this. I'm thinking mostly the opposite. Cost the taxpayers? How? Degrade the economy? Again, why? Increase home prices? If a potential 1/4 point interest drop increases home prices it will also help a lot of people buy homes. Kind of a wash IMO. People that buy houses also buy new carpet, appliances, cabinets, etc.

Maybe we should have the Fed buy a (another) $1 trillion in mortgage backed securities. It worked so well in 2020-2022. Better yet, have the Federal government purchase new carpet, new appliances and new cabinets, etc, for every person who buys a house. Illegals, multinational companies, everybody party! No sense being intelligent about it any more.

 

[glenn walker]

It's related to the GSEs being released out of the long Federal Receivership if Trump approves new stock issued and Fannie/Freddie going private. Their restructuring old debt ahead of this event. Trump says a final decision will be made in the next 30 to 60 days.

This has nothing at all to do with appraisals or your orders and any indirect effect would be the debt restructuring lowers interest rates but it would only be small bump down and nothing to drive a new real estate boom.

 

[Gobears81]

IMO, the risk to the economy isn't what happens when the $200 billion in buys take place, but when it stops. Take the QE of the 2010's that caused interest rates to artificially decline - that pulled forward demand, but also created sellers, as they were more inclined to move to a nicer house while interest rates were favorable. When the Fed became boxed in after COVID and interest rates reverted to market levels, the only sellers were the estates or those moving to nursing homes. The increasing population pushed an imbalance between supply and demand, so those that would have been candidates to buy a nicer home elected to stay with their current home, rather than pay significantly higher prices and at much higher interest rates.

The first-time homebuyer tax credit is another good example - shortly after it ends, there was a complete absence of activity in the lower-priced neighborhoods, outside of short sales and foreclosures that were snatched up at fire sale prices.

 

[TerryRohrer]

IMO, the risk to the economy isn't what happens when the $200 billion in buys take place, but when it stops. Take the QE of the 2010's that caused interest rates to artificially decline - that pulled forward demand, but also created sellers, as they were more inclined to move to a nicer house while interest rates were favorable. When the Fed became boxed in after COVID and interest rates reverted to market levels, the only sellers were the estates or those moving to nursing homes. The increasing population pushed an imbalance between supply and demand, so those that would have been candidates to buy a nicer home elected to stay with their current home, rather than pay significantly higher prices and at much higher interest rates.

The first-time homebuyer tax credit is another good example - shortly after it ends, there was a complete absence of activity in the lower-priced neighborhoods, outside of short sales and foreclosures that were snatched up at fire sale prices.

Everything the government does to enhance "affordability" gets bid into the price of homes, decreasing affordability over time. It increases taxes and increases insurance and increases risk and increases taxpayer liability. We just don't see the money stream from the Treasury to lenders and mortgage insurers, while borrower/taxpayers lose real equity and public debt increases at faster than inflation.

"Over the past 50 years, the rate of growth in total public debt has significantly outpaced the rate of inflation. While the average annual inflation rate has been around 3.7%, the national debt has grown at a much faster, compounding rate, particularly since the 1980s and following major crises. "