Fannie to help renters stay in foreclosed homes

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Monday December 15, 11:42 am ET

Mortgage giant Fannie Mae unveils plan-in-works to help renters stay in foreclosed properties

NEW YORK (AP) -- Fannie Mae said Monday it's finalizing a plan to help renters stay in their homes even if their landlord enters foreclosure.

The mortgage giant said it's working on a national policy to allow renters living in foreclosed properties -- and who can make their rental payments -- to sign new leases with Fannie while the property is up for sale or get cash to help move into a new home.


Last month, Fannie and sibling company Freddie Mac suspended foreclosure sales on occupied single-family homes and evictions from those properties through the holidays until Jan. 9, 2009. Fannie said these actions helped an estimated 7,000 to 10,000 families to remain in their homes.

The company said the new renter policy will go in effect before Jan. 9.

Last week, New Haven Legal Assistance Association Inc. in Connecticut, which represents several tenants facing eviction on properties held by Fannie Mae, raised the concerns about renter evictions and discussed the situation with Fannie on Friday.

"Fannie Mae had the tendency to empty these properties with no attempt before or after the foreclosure to contact these tenants," said Amy Marx, an attorney at the legal aid group. "A lot of these renters are low-income and an eviction wreaks havoc on their lives due to moving costs and the lack of affordable housing."

Despite the suspension on foreclosure sales and evictions, some Fannie evictions were still going forward, Marx said. Fannie said Monday it contacted its lawyer and broker network to halt those evictions.

Fannie and sibling company Freddie Mac own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the pair in September.

Company spokesman Brad German said Monday that Freddie Mac also aims to have a similar plan in place by early January.

"Clearly, renters are caught in the crossfire," German said. "The goal is to provide them some stability and not evict them as a result of another's foreclosure."

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FDIC chief Sheila Bair sees housing pain into 2010

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Thursday December 11, 9:25 pm ET By Marcy Gordon, AP Business Writer

WASHINGTON (AP) -- The housing crisis will drag on at least until 2010, time needed for credit markets to revive and government rescue programs to make an impact, the head of the Federal Deposit Insurance Corp. said Thursday.

FDIC Chairman Sheila Bair said regulators were bracing for a difficult year ahead as the economy staggers under the worst crisis since the 1930s and mounting job losses push new multitudes of struggling home borrowers into default.

"We think we're going to have a tough year next year, and we're preparing for that," Bair said in an interview with The Associated Press. "But we'll work through it."

"By 2010 we'll be seeing the light at the end of the tunnel," Bair said.

She spoke as industry reports showed the number of U.S. homeowners dragged into the housing crisis fell in November to the lowest level since June as new state laws lengthened the foreclosure process.

More than 259,000 homes nationwide received at least one foreclosure-related notice last month, down 7 percent from October, but 28 percent higher than a year ago, according to RealtyTrac.

Bair stressed that the preponderance of U.S. banks and thrifts -- some 90 percent -- continue to be in strong financial condition. Twenty-three banks have failed so far this year amid the economic tumult, including Seattle-based thrift Washington Mutual Inc. in September, the biggest bank collapse in U.S. history. That compares with three failures for all of 2007 and is far more than in the previous five years combined.

The government's rescue plan includes hundreds of billions of dollars in direct federal investment in U.S. banks, as well as an FDIC program of three-year guarantees for as much as $1.4 trillion in new loans between banks.

The goal is to thaw the credit freeze gripping the economy and encourage banks to lend, Bair said.

But on action to provide struggling homeowners the ability to switch into affordable loans and help stanch the foreclosure wave, "we're still behind, very much behind, the curve," she added.

Debate on that issue has been intensifying as Democrats, including President-elect Barack Obama, insist that the government must use some of the $700 billion in bailout funds to halt rising foreclosures.

That also is the stance of Bair, an independent regulator and moderate Republican, who broke with the Bush administration in pushing her proposal to use $24 billion in government bailout funds to help 1.5 million borrowers avoid foreclosure by guaranteeing modified home loans through the end of next year.

Bair said she "wished a structured program would have gotten under way sooner" and expressed frustration several times during an hourlong interview about not having seen her plan prevail. But she said, "I think we do need to look forward. There are a lot of borrowers to help."

A change of posture could come with the new administration.

Bair said she has "a good working relationship" with Obama's designated nominee for Treasury secretary, New York Federal Reserve President Timothy Geithner, with whom she helped negotiate terms of the government's multibillion-dollar rescue of Citigroup Inc. in intense talks over the weekend before Thanksgiving.

Bair convinced Geithner and Treasury Secretary Henry Paulson in those discussions that Citigroup should be required to modify mortgages to help distressed homeowners as a condition for the government agreeing to shoulder hundreds of billions of dollars in possible losses at the bank.

"I have a lot of respect for him," Bair said of Geithner. "He's a very bright guy and he's got a real policy sense."


Senior Democrats in Congress have asked President George W. Bush to appoint Bair to a special position overseeing a government-wide effort to stem foreclosures.

Asked her view on such a "housing czar" position in the new Obama administration, Bair said Thursday, "I think if you create a job and give that person real power to do something, that might be a good thing."

She allowed, however, that it could be difficult to achieve and for that official to have an "overarching" function above the various federal agencies that deal with housing and mortgage issues, including the Treasury and the Federal Reserve.

"I am very happy right where I am," said Bair, whose term extends to 2011. "But I do want to accommodate the new administration in whatever capacity."

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Foreclosure activity drops to June levels

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Thursday December 11, 1:12 am ET By Alan Zibel, AP Real Estate Writer

New foreclosure filings fall to lowest level since June

WASHINGTON (AP) -- The number of American homeowners dragged into the housing crisis fell last month to the lowest level since June as new state laws lengthened the foreclosure process, RealtyTrac reported Thursday.

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"We're going to have a pretty significant spike in January," said Rick Sharga, RealtyTrac's vice president for marketing. Plus, as job losses mount, "increases in foreclosure activity follow that pretty directly," he added.

Nationwide, more than 259,000 homes received at least one foreclosure-related notice in November, down 7 percent from October, but 28 percent higher than a year ago, RealtyTrac said.

The report comes as Democrats, including President-elect Barack Obama, insist that the government must use some of the bailout funds to halt rising foreclosures.

Last week, the Mortgage Bankers Association reported that a record one in 10 American homeowners with a mortgage was either at least one month behind on their payments or in foreclosure at the end of September.

RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 78,000 properties were repossessed by lenders last month, said the Irvine, Calif.-based company.

The worst recession in decades, falling home values and stricter lending standards have ensnared millions of U.S. households. The Federal Reserve predicts that new foreclosures this year will reach about 2.25 million, more than double pre-crisis levels.

In RealtyTrac's report, Nevada, Florida and Arizona had the nation's top foreclosure rates. In Nevada, one in every 76 homes received a foreclosure filing last month. Florida saw one in every 173 properties receive a foreclosure filing, and in Arizona it was one in every 198 homes. Rounding out the top 10 were California, Michigan, Georgia, Ohio, Colorado, Utah and Idaho.

Among metro areas, the Cape Coral-Fort Myers area in Florida was first, with one in every 59 housing units receiving a foreclosure filing. It was followed by Las Vegas, and the California cities of Merced, Modesto and Stockton.

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Obama: Economy to get worse before it improves

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Sunday December 7, 11:23 am ET By David Espo, AP Special Correspondent

Obama says economy to get worse before it gets better; priority is on recovery plan

WASHINGTON (AP) -- President-elect Barack Obama said the economy seems destined to get worse before it gets better and he pledged a recovery plan "that is equal to the task ahead."

Obama also said in an interview broadcast Sunday that the survival of the domestic car-making capacity is important, yet any bailout must be "conditioned on an auto industry emerging at the end of the process that actually works."

Less than six weeks before he takes office, Obama said that help for homeowners facing foreclosure is an option as part of his plan. He sidestepped a question about when he plans to raise taxes on wealthy Americans.

Obama's interview on NBC's "Meet the Press" was his most extensive since winning the White House more than a month ago.

In the intervening weeks, the economy has showed clear signs of worsening. Employers said they eliminated more than 500,000 jobs in November alone and retailers reported disappointing holiday-season sales.

"The economy is going to get worse before it gets better," he said twice in the early moments of the interview, taped Saturday in Chicago.

The president-elect announced on Saturday he would call for the most massive spending on public works since the creation of the interstate highway system a half-century ago. In a word of caution to powerful lawmakers, he said the first priority would be "shovel-ready" projects -- those that could create jobs rights away.

"The days of just pork coming out of Congress as a strategy those days are over," he added.

Obama said repeatedly that his economic advisers are at work on an economic aid package, but he has largely stayed out of the public debate over bailout aid to the Detroit automakers. Congress and the Bush administration are at work on a plan for roughly $15 billion for General Motors Corp., Ford Motor Co. and Chrysler LLC. Congressional leader hope to pass the measure this week.

Obama suggested he would support such a plan, so long as it was accompanied by conditions to "keep the automakers' feet to the fire in making the changes that are necessary" for longer-term survival. He also indicated he did not believe bankruptcy is an acceptable course of action for any of the companies.

The president-elect sidestepped a question about the pace of a troop withdrawal from Iraq, saying he would direct U.S. generals to come up with a plan "for a responsible drawdown." He said in the campaign he wanted most U.S. troops withdrawn within 16 months, but did not say then, nor has he now, how large a deployment should be left behind.

Obama also spoke about his latest Cabinet selection, retired Gen. Eric Shinseki to head the Veterans Affairs Department. Shinseki was forced into retirement by the Bush administration after he said the original invasion plan for Iraq did not include enough troops.

"He was right," Obama said.

The president-elect declined to comment on the possible appointment of Caroline Kennedy to New York Sen. Hillary Rodham Clinton's seat in the Senate. Obama tapped Clinton recently as his secretary of state.

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Dow plunges on news recession began in Dec. 2007

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Monday December 1, 9:11 pm ET
By Jeannine Aversa and Martin Crutsinger, AP Economics Writers

WASHINGTON (AP) -- Most Americans sorely knew it already, but now it's official: The country is in a recession, and it's getting worse. Wall Street convulsed at the news -- and a fresh batch of bad economic reports -- tanking nearly 680 points. With the economic pain likely to stretch well into 2009, Federal Reserve Chairman Ben Bernanke said Monday he stands ready to lower interest rates yet again and to explore other rescue or revival measures.

Rushing in reinforcements, Treasury Secretary Henry Paulson, who along with Bernanke has been leading the government's efforts to stem the worst financial crisis since the 1930s, pledged to take all the steps he can in the waning days of the Bush administration to provide relief. Specifically, Paulson is eyeing more ways to tap into a $700 billion financial bailout pool.

On Capitol Hill, House Speaker Nancy Pelosi, D-Calif., vowed to have a massive economic stimulus package ready on Inauguration Day for President-elect Barack Obama's signature.

That measure -- which could total a whopping $500 billion -- would bankroll big public works projects to generate jobs, provide aid to states to help with Medicaid costs and provide money toward renewable energy development. Crafting such a colossal recovery package would mark a Herculean feat: Congress convenes Jan. 6, giving lawmakers just two weeks to complete their work if it is to be signed on Jan. 20.

President George W. Bush, in an interview with ABC's "World News," expressed remorse about lost jobs, cracked nest eggs and other damage wrought by the financial crisis. "I'm sorry it's happening, of course," said Bush. The president said he'd back more government intervention.

None of the pledges for more action could comfort Wall Street investors. The Dow Jones industrials plunged 679.95 points, or 7.70 percent, to close at 8,149.09.

It was another white-knuckle day, punctuated by grim economic reports. An index of manufacturing activity sank to a reading of 36.2 in November, a 26-year low, the Institute for Supply Management reported. Construction spending fell by a larger than expected 1.2 percent in October, the Commerce Department said.

Adding to the gloom, the National Bureau of Economic Research, a group of academic economists, concluded Monday that the country has been suffering through a recession since December 2007.

With NBER's decision, the United States has fallen into two recessions during Bush's eight years in office. The first one started in March 2001 and ended in November of that year.

The economy jolted into reverse in the final three months of last year. After a short spring rebound, it contracted again in the summer. Economists say it is still shrinking and will continue to do so through at least the first quarter of next year.

Unlike past recessions, consumers are bearing the brunt of this one. Clobbered by job losses, hard-to-get credit and hits to their wealth from sinking home values and plunging portfolio investments, consumers have cut back sharply on their spending, throwing the economy into chaos.

Watching customers' appetites wane, employers have throttled back on hiring. The unemployment rate in October zoomed to 6.5 percent, a 14-year high. So far this year, 1.2 million positions have disappeared. The jobless rate is likely to climb to 8 percent or higher next year.

Against that backdrop, many economists believe the current recession will be the worst since the 1981-82 downturn.

To help ease the pain, Bernanke said additional interest-rate cuts are "certainly feasible," but he warned there are limits to how much such action would revive the economy, which is likely to stay mired in weakness well into next year.

The Fed's key interest rate now stands at 1 percent, a level seen only once before in the past half-century, and many economists predict Bernanke and his colleagues will drop the rate again at their next meeting on Dec. 15-16.

The Fed can lower its key rate only so far -- to zero -- and it's getting ever closer. Given that constraint, Bernanke said there are other ways to bolster economic activity.

The Fed, for instance, could buy longer-term Treasury or agency securities on the open market in substantial quantities, he said. This might lower rates on these securities, "thus helping to spur aggregate demand," Bernanke said.

Because the Fed can go only so low in reducing interest rates, the central bank over the past year has resorted to a flurry of other radical and often unprecedented actions with the hope of busting through credit jams and getting financial markets operating more normally.

The bracing impact of the Fed's aggressive rate reductions, however, has been somewhat stymied by the credit and financial crises, Bernanke said. Despite lower borrowing costs, skittish banks have been reluctant to lend money to people and businesses, a vicious cycle that has seriously hobbled the U.S. economy.

"Even if the functioning of financial markets continues to improve, economic conditions will probably remain weak for a time," Bernanke warned.

Paulson, meanwhile, has been working closely with the incoming administration, including New York Fed President Timothy Geithner, Obama's pick to be the next treasury secretary, to pave the way for a smooth transition.

"We are actively engaged in developing additional programs to strengthen our financial system so that lending flows into our economy," Paulson said, referring to tapping the $700 billion bailout fund. "When these programs are ready for implementation, we will discuss them with the Congress and the next administration," he added.

Paulson did not provide specifics on what type of programs the administration was weighing other than to say that it was looking at ways to boost capital injections into financial institutions.

Associated Press Writers Andrew Taylor and Deb Riechmann contributed to this report.

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Fannie Mae, Freddie Mac suspend foreclosure sales

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Fannie Mae, Freddie Mac suspend foreclosure sales
Restriction is in place from Nov. 26 to Jan. 9

By Ronald D. Orol, MarketWatch

"Freddie Mac is on track to help three out of every five troubled borrowers with Freddie Mac-owned loans avoid foreclosure this year," Freddie Mac Chief Executive David Moffett said in a statement. "Today's announcement builds on this momentum and provides a new measure of certainty to many of these families during the holidays."

The government-controlled mortgage companies said they are ordering a national network of mortgage servicers and foreclosure attorneys to prohibit the sale of foreclosed homes for single-family and two- to four-unit properties with mortgages owned by the two entities.

Freddie Mac's Moffett added he expects that lenders servicing Freddie Mac-owned mortgages will work with borrowers to help people stay in their homes. Freddie Mac plans to approve settlements for mortgage payments with roughly 84,000 homeowners; however, 140,000 mortgages are delinquent on Freddie Mac-owned mortgages.

The suspension of foreclosure sales was motivated, in part, by a desire by Freddie Mac to allow mortgage-service firms to take additional time to work with borrowers as part of its Streamlined Modification mortgage program, scheduled to launch on Dec. 15. The loan-modification plan helps homeowners who haven't been able to make their payments for the previous three months.

James Lockhart, the director of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac said in a statement that the suspension will give "delinquent borrowers ... an opportunity to avoid foreclosure and work out terms."

The Fannie Mae and Freddie Mac action comes as the stock market sank Thursday on news that Congress didn't reach a deal on a bailout for the automotive sector, as well as a number of negative indicators. The Dow Jones industrial average fell 445 points, or 5.6% while the Standard & Poor's 500 index fell to 776.76, or 6.7%.

On Thursday, first-time filings for unemployment benefits rose to the greatest level since July 1992, shooting up to 27,000 to a seasonally adjusted 542,000, and the index of leading economic indicators fell 0.8% in October, showing the economy is very weak and getting weaker.

Ronald D. Orol is a MarketWatch reporter, based in Washington.

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Here is what you have been waiting for...

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Well, it's time! We have promised something EXTRAORDINARY and now is the time. We have a very special promotion to announce that will relieve some of the stress people feel about the economy. Here it is...

FREE $200 in Gas and a Chance to Win a Trip to Anywhere in the Continental US

Beginning October 1, 2008 and lasting until April 30, 2009, for any property we purchase, we will give the seller* a FREE $200 gas card. Just think, you will have a gas card which will in turn help you save $200! But that's not all. When we buy your property, you will be entered into a drawing to win a trip to anywhere in the continental United States**! Just imagine being able to go to beautiful locales such as Walt Disney World or Las Vegas or Washington DC or Los Angeles, etc.

So, if you want that $200 gas card and a chance to win a trip to anywhere in the continental US, e-mail us today at customercare@cashnowforyourhome.com to allow us to submit an offer on your property.

For complete rules, send a self-addressed stamped envelope to:

www.CashNowForYourHome.com
P. O. Box 178495
Chicago, IL 60617-8495

*No purchase necessary. Void where prohibited. One gas card per property purchased. To be eligible, the property must be under contract and close before June 30, 2009. The $200 in gas may be paid with more than one gas card. The gas card payment will be paid within 30 days of closing. Winner is reponsible for all taxes.

**The trip includes airfare and hotel stay for up to four days and three nights. We reserve the right to chose the air carrier and the hotel used. Winner is responsible for all taxes.

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10 Reasons You're Not Rich

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Here is an interesting article we read recently about ten reasons people don't get rich. Enjoy!

10 (More) Reasons You're Not Rich
by Jeffrey Strain

Many people assume they aren't rich because they don't earn enough money. If I only earned a little more, I could save and invest better, they say.

The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it's how you treat money in your daily life.

The list of reasons you may not be rich doesn't end at 10. Caring what your neighbors think, not being patient, having bad habits, not having goals, not being prepared, trying to make a quick buck, relying on others to handle your money, investing in things you don't understand, being financially afraid and ignoring your finances.

Here are 10 more possible reasons you aren't rich:

You care what your car looks like: A car is a means of transportation to get from one place to another, but many people don't view it that way. Instead, they consider it a reflection of themselves and spend money every two years or so to impress others instead of driving the car for its entire useful life and investing the money saved.

You feel entitlement: If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.

You lack diversification: There is a reason one of the oldest pieces of financial advice is to not keep all your eggs in a single basket. Having a diversified investment portfolio makes it much less likely that wealth will suddenly disappear.

You started too late: The magic of compound interest works best over long periods of time. If you find you're always saying there will be time to save and invest in a couple more years, you'll wake up one day to find retirement is just around the corner and there is still nothing in your retirement account.

You don't do what you enjoy: While your job doesn't necessarily need to be your dream job, you need to enjoy it. If you choose a job you don't like just for the money, you'll likely spend all that extra cash trying to relieve the stress of doing work you hate.

You don't like to learn: You may have assumed that once you graduated from college, there was no need to study or learn. That attitude might be enough to get you your first job or keep you employed, but it will never make you rich. A willingness to learn to improve your career and finances are essential if you want to eventually become wealthy.

You buy things you don't use: Take a look around your house, in the closets, basement, attic and garage and see if there are a lot of things you haven't used in the past year. If there are, chances are that all those things you purchased were wasted money that could have been used to increase your net worth.

You don't understand value: You buy things for any number of reasons besides the value that the purchase brings to you. This is not limited to those who feel the need to buy the most expensive items, but can also apply to those who always purchase the cheapest goods. Rarely are either the best value, and it's only when you learn to purchase good value that you have money left over to invest for your future.

Your house is too big: When you buy a house that is bigger than you can afford or need, you end up spending extra money on longer debt payments, increased taxes, higher upkeep and more things to fill it. Some people will try to argue that the increased value of the house makes it a good investment, but the truth is that unless you are willing to downgrade your living standards, which most people are not, it will never be a liquid asset or money that you can ever use and enjoy.

You fail to take advantage of opportunities: There has probably been more than one occasion where you heard about someone who has made it big and thought to yourself, "I could have thought of that." There are plenty of opportunities if you have the will and determination to keep your eyes open.

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Countrywide Agrees to $8.7 Billion Settlement

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The Attorney General of Illinois as well as Attorneys General in ten other states have reached a settlement with Countrywide. Countrywide, which is the country's largest mortgage lender and servicer, agreed to a settlement worth about $8.7 billion. The agreement is the first of its kind and may serve as a model for other companies who may have a substantial amount of defaulted loans.

Under the terms of the settlement, Countrywide agreed to the following:

• Suspend foreclosures on the riskiest loans to determine if borrowers qualify for modification.
• Establish a Foreclosure Relief Fund of $8.5 million for borrowers in subprime and pay option ARM loans who lost their homes due to early payment default or default at the time the interest rate reset. Early payment default is a strong indication that the loan was not underwritten properly and that the homeowner couldn’t afford the loan from the beginning.
• Help homeowners through a $1 million relocation assistance program, which will provide payments to homeowners who cannot qualify for a loan modification. The funds will help borrowers relocate if necessary.
• Waive loan modification fees and late fees.
• Waive prepayment penalties on subprime and pay option arm loans owned by Countrywide.
• Pay $1.7 million for the costs incurred in Madigan’s investigation, eliminating taxpayer expense.

Homeowners who have questions about the settlement may call Bank of America at 1-800-669-6607 or Lisa Madigan's Homeowners' Referral Hotline at 1-866-544-7151 from 8 a.m. to 8 p.m. Monday to Friday. You may also read the Illinois Attorney General's press release at its web site.

Don't have a loan with Countrywide but you would like to see if you are a candidate for a loan modification? Get the special report, "Are You a Candidate for a Loan Modification".

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Chicago home prices fall less than in U.S.

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(Reuters) — Prices of single-family homes plunged a record 16.35 percent in July from a year earlier, according to the Standard & Poor's/Case-Shiller Home Price Indices.
The Chicago area didn’t do as badly, with prices down 10 percent in July compared with July 2007, according to the S&P/Case-Shiller numbers.

The S&P/Case-Shiller composite index of 20 metropolitan areas fell 0.9 percent in July from June, S&P said in a statement Tuesday. Since the peak of the housing boom in July 2006, the index has dropped 19.5 percent, it said.

In the Chicago area, prices were down 0.35 percent in July compared with June.

S&P said its composite index of 10 metropolitan areas declined 1.1 percent in July for a 17.5 percent year-over-year drop. From two years ago, the index is down 21.1 percent.
However, the pace of home price declines has slowed in the past three months, S&P said.

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House and Senate Contact Information

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Hello, everyone. There has been much talk about the $700 billion bailout package. One cannot turn on the television or radio or connect to the Internet without hearing about it. The decisions that will be made will have an effect on us all.

Whether you agree with the decisions that will be made or not is an issue that should be taken up with your local Congressmen and/or Senators. We have received much feedback from our post about President Bush's speech last week. Many people wanted the contact information for their respective congressman and/or senator. The contact links for these politicians can be found at www.house.gov and www.senate.gov.

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Sell Your Property and Improve Your Credit - MortgageFREEDOM!

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MortgageFREEDOM! is an innovative way for you to sell your house, solve your back payment or foreclosure situation, improve your credit, and relieve a stressful life all at the same time. This program will work even if you have no equity in your property!

If you are viewing this page then it is safe to assume that you are either behind on your mortgage payments or in foreclosure. You may even have little to no equity in your property.

There are many people out there in the marketplace like you, so you are not alone. Your situation is one that can be fixed. Fixing the problem may require some time and good old-fashion common sense. People may tell you that you don't have time left. What they may be telling you is that you have to make a decision quickly and ACT on it. Frequently people in foreclosure tend to procrastinate and hope the situation will resolve itself. Trust me when I tell you that it won't.

We received a phone call in the summer of 2005 from a real estate agent. The real estate agent told us that she was contacted by a man whose house is in foreclosure. We asked her, "Why didn't she try to list the house?" She said the house had very little equity in it, about 2%, and the auction date was Tuesday. She called us on the preceding Thursday. We then asked her why the owner waited so late to act. She said he thought he could sell the house himself to cover the amount he owes and to pocket a couple of thousand dollars to cover moving expenses. We told her there was nothing that we could do for him at this late date. She then thanked us for our time.

Folks, this is one example of someone who procrastinated and one who did not know his options. You might ask, "What are my options when facing foreclosure?" You had a few options before you read this page:

1. Give the house to the bank before the auction date, or deed in lieu of foreclosure
2. File bankruptcy
3. Wait for the house to be sold at auction
4. Refinance the house
5. Sell the house for the amount that is owed

The first three options will destroy your credit rating. In the case of bankruptcy, you may be put into a position where you can't afford the payments ordered by the courts. If you do nothing and wait until the auction, you may be put into a position where, after court costs, attorney fees, missed escrow payments, property taxes, etc., you still owe after the house is sold. The bank may be able to sue you and garnish your wages to the recover the remainder. MortgageFREEDOM! can help you even before you get to this point.

You might try to refinance your house. Chances are you won't be able to do this. Remember, you are in foreclosure and you probably have no equity in your house. No bank will want to help you. But MortgageFREEDOM! can help.

If you try to sell the house, chances are you will want to sell the house for the amount you owe. You might also want to raise enough money to cover moving expenses. Many real estate investors are looking for houses with equity and a positive cash flow. If you have no equity in your house, it makes it hard for the investor during times when the market declines. That will wipe out his net worth. Also, if he has to fix up the house, he has to put more money into the deal. These types of deals are not suitable for the average investor. It is, however, suitable for MortgageFREEDOM!

Let me explain to you how MortgageFREEDOM! can help you:

• MortgageFREEDOM! can help you become proactive so that you can ACT,
• MortgageFREEDOM! can help you stop your foreclosure,
• MortgageFREEDOM! can help you sell your house even if you have no equity,
• MortgageFREEDOM! can help you improve your credit rating without doing anything extra,
• MortgageFREEDOM! can help you reduce and even eliminate the cost of repairs of your house,
• MortgageFREEDOM! can help stop the harassing calls and letters,
• and finally, MortgageFREEDOM! can help you eliminate the stress in your life

You owe it to yourself to get back on track. Let MortgageFREEDOM! help you today. If you are interested in getting started, fill out the Seller Information Form.

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Something EXTRAORDINARY is going to happen at our web site...

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Below is a message that was sent to our customers and prospects on Monday, September 22, 2008:

"...and we don't want you to miss it. You visited our web site to get information on how we can provide you with peace of mind. The fact that you want to sell your house is a solid indication. Whatever the pain in your life may be, divorce, bankruptcy, relocation, job loss, upsizing, downsizing, bad tenants, foreclosure, adjustable rates about to reset, etc., we have a solution for you.

We also have something unique that we're going to offer as an added incentive for you to do business with us!

People have been hit with much more stress these days. We'll just list a couple:

High gas prices
Uncertainty in the market

We want you to do business with us, but we also want to make life a little bit easier for you.

So what are we offering you? Again, we are going to do something unique to our company, something we have never done before. We are going to give you something very special and give you a chance to win something that is EXTREMELY special!

Mark Wednesday, October 15, 2008 down on your calendar. In fact, make a note of the time also-- 10:00 a.m. Central Daylight Time. On that day and at that hour, we will announce something that will indeed add some peace of mind to you life. The announcement will be made on our blog. If you have not already done so, visit our blog. Make sure you sign up to receive updates on the blog.

Let us help you receive peace of mind! Don't miss out on a unique opportunity!"

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Transcript - President Bush addresses the nation about the $700 billion bailout package - September 24, 2008

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WASHINGTON -- "Good evening. This is an extraordinary period for America's economy.

Over the past few weeks, many Americans have felt anxiety about their finances and their future. I understand their worry and their frustration.

We've seen triple-digit swings in the stock market. Major financial institutions have teetered on the edge of collapse, and some have failed. As uncertainty has grown, many banks have restricted lending, credit markets have frozen, and families and businesses have found it harder to borrow money.

We're in the midst of a serious financial crisis, and the federal government is responding with decisive action.

We boosted confidence in money market mutual funds and acted to prevent major investors from intentionally driving down stocks for their own personal gain.

Most importantly, my administration is working with Congress to address the root cause behind much of the instability in our markets.

Financial assets related to home mortgages have lost value during the house decline, and the banks holding these assets have restricted credit. As a result, our entire economy is in danger.

So I propose that the federal government reduce the risk posed by these troubled assets and supply urgently needed money so banks and other financial institutions can avoid collapse and resume lending.

This rescue effort is not aimed at preserving any individual company or industry. It is aimed at preserving America's overall economy.

It will help American consumers and businesses get credit to meet their daily needs and create jobs. And it will help send a signal to markets around the world that America's financial system is back on track.

I know many Americans have questions tonight: How did we reach this point in our economy? How will the solution I propose work? And what does this mean for your financial future?

These are good questions, and they deserve clear answers.

First, how did our economy reach this point? Well, most economists agree that the problems we're witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business.

This large influx of money to U.S. banks and financial institutions, along with low interest rates, made it easier for Americans to get credit. These developments allowed more families to borrow money for cars, and homes, and college tuition, some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit, combined with the faulty assumption that home values would continue to rise, led to excesses and bad decisions.

Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

Optimism about housing values also led to a boom in home construction. Eventually, the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell, and this created a problem.

Borrowers with adjustable-rate mortgages, who had been planning to sell or refinance their homes at a higher price, were stuck with homes worth less than expected, along with mortgage payments they could not afford.

As a result, many mortgage-holders began to default. These widespread defaults had effects far beyond the housing market.

See, in today's mortgage industry, home loans are often packaged together and converted into financial products called mortgage-backed securities. These securities were sold to investors around the world.

Many investors assumed these securities were trustworthy and purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac.

Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.

The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses.

Before long, these securities became so unreliable that they were not being bought or sold. Investment banks, such as Bear Stearns and they could not sell. They ran out of money needed to meet their immediate obligations, and they faced imminent collapse.

Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt.

With the situation becoming more precarious by the day, I faced a choice, to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all.

I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business.

Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence, and major sectors of America's financial system are at risk of shutting down.

The government's top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.

More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically.

And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs.

Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And, ultimately, our country could experience a long and painful recession.

Fellow citizens, we must not let this happen. I appreciate the work of leaders from both parties in both houses of Congress to address this problem and to make improvements to the proposal my administration sent to them.

There is a spirit of cooperation between Democrats and Republicans and between Congress and this administration. In that spirit, I've invited Senators McCain and Obama to join congressional leaders of both parties at the White House tomorrow to help speed our discussions toward a bipartisan bill.

I know that an economic rescue package will present a tough vote for many members of Congress. It is difficult to pass a bill that commits so much of the taxpayers' hard-earned money.

I also understand the frustration of responsible Americans who pay their mortgages on time, file their tax returns every April 15th, and are reluctant to pay the cost of excesses on Wall Street.

But given the situation we are facing, not passing a bill now would cost these Americans much more later.

Many Americans are asking, how would a rescue plan work? After much discussion, there's now widespread agreement on the principles such a plan would include.

It would remove the risk posed by the troubled assets, including mortgage-backed securities, now clogging the financial system. This would free banks to resume the flow of credit to American families and businesses.

Any rescue plan should also be designed to ensure that taxpayers are protected. It should welcome the participation of financial institutions, large and small. It should make certain that failed executives do not receive a windfall from your tax dollars.

It should establish a bipartisan board to oversee the plan's implementation, and it should be enacted as soon as possible.

In close consultation with Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke, and SEC Chairman Chris Cox, I announced a plan on Friday.

First, the plan is big enough to solve a serious problem. Under our proposal, the federal government would put up to $700 billion taxpayer dollars on the line to purchase troubled assets that are clogging the financial system.

In the short term, this will free up banks to resume the flow of credit to American families and businesses, and this will help our economy grow.

Second, as markets have lost confidence in mortgage-backed securities, their prices have dropped sharply, yet the value of many of these assets will likely be higher than their current price, because the vast majority of Americans will ultimately pay off their mortgages.

The government is the one institution with the patience and resources to buy these assets at their current low prices and hold them until markets return to normal.

And when that happens, money will flow back to the Treasury as these assets are sold, and we expect that much, if not all, of the tax dollars we invest will be paid back.

The final question is, what does this mean for your economic future? Well, the primary steps -- purpose of the steps I've outlined tonight is to safeguard the financial security of American workers, and families, and small businesses. The federal government also continues to enforce laws and regulations protecting your money.

The Treasury Department recently offered government insurance for money market mutual funds. And through the FDIC, every savings account, checking account, and certificate of deposit is insured by the federal government for up to $100,000.

The FDIC has been in existence for 75 years, and no one has ever lost a penny on an insured deposit, and this will not change.

Once this crisis is resolved, there will be time to update our financial regulatory structures. Our 21st-century global economy remains regulated largely by outdated 20th-century laws.

Recently, we've seen how one company can grow so large that its failure jeopardizes the entire financial system.

Earlier this year, Secretary Paulson proposed a blueprint that would modernize our financial regulations. For example, the Federal Reserve would be authorized to take a closer look at the operations of companies across the financial spectrum and ensure that their practices do not threaten overall financial stability.

There are other good ideas, and members of Congress should consider them. As they do, they must ensure that efforts to regulate Wall Street do not end up hampering our economy's ability to grow.

In the long run, Americans have good reason to be confident in our economic strength. Despite corrections in the marketplace and instances of abuse, democratic capitalism is the best system ever devised.

It has unleashed the talents and the productivity and entrepreneurial spirit of our citizens. It has made this country the best place in the world to invest and do business. And it gives our economy the flexibility and resilience to absorb shocks, adjust, and bounce back.

Our economy is facing a moment of great challenge, but we've overcome tough challenges before, and we will overcome this one.

I know that Americans sometimes get discouraged by the tone in Washington and the seemingly endless partisan struggles, yet history has shown that, in times of real trial, elected officials rise to the occasion.

And together we will show the world once again what kind of country America is: a nation that tackles problems head on, where leaders come together to meet great tests, and where people of every background can work hard, develop their talents, and realize their dreams.

Thank you for listening. May God bless you."

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Take Steps to Avoid Foreclosure (Part 2)

by Richard Woodfork, www.CashNowForYourHome.com

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Welcome back. A few days ago I posted the first part of this article, "Take Steps to Avoid Foreclosure (Part 1)". I discussed my observations while driving through a neighborhood in Chicago. The things I saw are not unique to this area. Foreclosure is an epidemic that plagues neighborhoods across the country-- rich and poor, urban and rural.

I was watching the news this morning and heard the continued reports about the collapse of Lehman Brothers, Freddie Mac, Fannie Mae, and Bear Stearns. And within the past few days, the Federal government has agreed to give $85 BILLION to AIG, the world's largest insurer. If large companies like these feel the stresses of the economy, imagine what we are feeling.

I point out these news stories so that people will take action to resolve their situation. The previous article focused on your actions before the lender files a formal lawsuit. This article will give you some tips to help you if the lender has already filed.

After the lender has filed a formal lawsuit against you, your options become more limited. Additionally, time is of the essence. All parties of the lawsuit must adhere to a certain timetable. Because I am not an attorney and the laws differ from state to state and county to county, please refer your questions to an attorney. Perhaps I will have an attorney write an article for this blog in the future. Stay tuned to this blog by signing up in the upper right hand corner so that you won't miss any information. We will post links to various resources. Here are your options after the lender has filed a notice of default:

1. Reinstate the loan - You may pay the lender the back payments, interest, penalties, legal expenses, and all other expenses associated with the collection of the debt and reinstate the loan. This action will stop the foreclosure.
2. Sell your house - This is fairly straight-forward. There are three ways that you can sell your house-- through a real estate agent, for sale by owner, or to an investor. There are pros and cons to the three ways. Sign up to receive updates to this blog. We will post an article about the pros and cons of each. To help you get started, read another article that was posted on this blog, "Tips to Help You Sell Your House in Today's Market".
3. Seek a "short sale" - If your house is worth less than what you owe, you may convince the lender to accept a "short sale". A short sale is when the lender accepts less than what you owe as full payment of the loan. There are various laws and criteria involved. Additionally, there may be paperwork that must be completed before the lender even agrees to ponder a short sale. If you are interested in pursuing a short sale, submit information about your property to us. We have relationships with various firms that negotiate short sales.
4. Sign a "deed-in-lieu of foreclosure" - When you sign a deed-in-lieu of foreclosure, you are effectively giving title to the property to the bank. It helps to cut down on the added expenses of the foreclosure. Your credit will be affected. Contact a national credit restoration law firm today to help with your credit.
5. File bankruptcy - Bankruptcy should be a last resort. Please keep in mind that the bankruptcy will not stop the foreclosure. It will only postpone it. Contact a bankruptcy attorney for more information.

There you have it. The keys to surviving a foreclosure is maintain a cool head and rational thinking. If you would like a hassle-free offer on your home, contact us today. We have experience with dealing with people who are behind on their payments or in foreclosure.

Check out the links below to help you:

Articles - Take Steps to Avoid Foreclosure (Part 1) - Tips to Help You Sell Your House in Today's Market

Sell Your House - www.CashNowForYourHome.com/wb16 or (888) 803-1392 ext 1544

Credit Restoration - Denied Credit ? Repair Your Credit Report Today!

Legal Disclaimer

Every effort has been made to comply with federal, state and local laws regarding the material presented. We make no representations or guarantees that the material will work for your particular needs, and we disclaim any warranties, express, implied or for any particular purpose you may need. You understand that all material is provided for example only and that it is strongly advise that you seek legal counsel for advice to make certain it is applicable to your situation. It is also advised that you review the potential financial and tax implications of any actions with a qualified professional before proceeding.

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Take Steps to Avoid Foreclosure (Part 1)

by Richard Woodfork, www.CashNowForYourHome.com

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I was driving through a neighborhood on the southeast side of Chicago this past Saturday and I was amazed at how the area had gone down. The area itself was never the best area to live in, but it was a place where people had a sense of pride. As I drove down one particular block, I slowed my car to witness five houses and multi-units in row that were abandoned. I looked towards the opposite side of the street and noticed numerous other vacant structures. As I continued, I again saw countless pieces of real estate that were without occupants.

I immediately started writing this article to try to help people during this current economic downturn. The perils that our country faces today on the economic front have taken away the concept of the American Dream. What was once places where people could call home were now dilapidated and rodent-infested nightmares. I hope that after people read this article, they will begin to take control of their lives so that we can build this country back up, one house and one homeowner at a time.

All of these dwellings that I saw were once occupied. They are all now the waste and carnage of foreclosure. They are all now owned by the mortgage companies who hoped to help people realize the American Dream (and make some money in the process).

So, what is foreclosure? Foreclosure is a court action initiated by a lender or a lien holder for the purpose of having the court order the debtor's real estate sold to pay the loan or other lien (mechanic's lien or judgment). It is a legal process. There are specific steps the lender or lien holder must take to force the sell of the property. These steps are governed by various state and Federal laws.

If you're behind on your mortgage payments or facing foreclosure, receive a hassle-free offer on your property.

Please keep in mind, the lenders do not want to foreclose on the real estate. They are in the lending business not the real estate management business. The worse thing that can happen to them is that they foreclose on the property. With the way the economy is now, it is very likely that they will receive the property back instead of receiving their money.

Let's not get things mixed up here. The lender WILL foreclose on a person's home if they feel that this is the only way the situation can get resolved. This is also their last choice. They prefer to work with home-owners to help get them back on track. Here are the steps you must take to avoid foreclosure:

1. If you are unable to meet your obligation, call the lender immediately.
   
2. Do not ignore letters from the lender. Your failure to respond will make the situation worse not better.
   
3. Assess your current financial state to find out where you can cut expenses and raise money to pay back your delinquency.
   
4. Talk to friends and family to help you cope with the added stress.
   
5. Take the time to relax. Do something you enjoy.
   
6. Contact a professional to solicit their input.

If you're behind on your mortgage payments or facing foreclosure, receive a hassle-free offer on your property.

There are options you may have when you talk to the lender:

1. Forebearance - The lender may postpone any foreclosure action against you if you can repay the delinquent amount you owe within a short period of time.
   
2. Forgive the payment - If you can convince the lender you experienced a temporary setback and you will not miss a payment again, you may be able to have the delinquency forgiven. They may waive the amount.
   
3. Spread the payment over a longer time frame - Sometimes the lender will allow you to repay the delinquent amount over a longer period of time. The prefer to have the money sooner than later, but they also do not want to foreclose. For example, you may have a normal mortgage payment of $1500 per month. You may be four months behind. The lender may allow you to pay back the $6,000 plus interest over say five years by adding approximately $100 per month to your payment. You will now pay $1600 per month for five years and then $1500 per month after fives until the mortgage is paid.
   
4. Loan modification - If the you have an adjustable rate mortgage, the lender may agree to freeze the interest rate or change the interest rate to an amount that is mutually beneficial. They may also increase the term of the loan to lower the payments.
   
   
5. Move the amount owed to the end of the loan - If you have some equity in your property, the lender may move the amount owed to the back of the loan. There may be a balloon payment at the end or larger payments for a few months.
   
6. Make an additional loan to you - Some loans that are backed by the government contain provisions to help home-owners who are in trouble. Check different government web sites such as those for the Department of Housing and Urban Development (HUD) and the Department of Veteran Affairs (VA) for more information.

As stated, the lender does not want to foreclose. Foreclosures cost the lender BIG money and hurts their ability to borrow money.

If you're behind on your mortgage payments or facing foreclosure, receive a hassle-free offer on your property.

This article covered some of the things you can do to avoid foreclosure. But what if the lender has already filed a notice of default against you? Stay tuned in a few days for answers to your questions.

Legal Disclaimer

Every effort has been made to comply with federal, state and local laws regarding the material presented. We make no representations or guarantees that the material will work for your particular needs, and we disclaim any warranties, express, implied or for any particular purpose you may need. You understand that all material is provided for example only and that it is strongly advise that you seek legal counsel for advice to make certain it is applicable to your situation. It is also advised that you review the potential financial and tax implications of any actions with a qualified professional before proceeding.

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Tips to Help Sell Your House in Today's Market

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We have talked to sellers who want to sell their house. All too often, they base their asking price on yesterday's market. Yesterday's market of escalating property values is over. You have heard the reports on television, in the newspapers, and on the Internet. We are in one of the worst markets in history. We have read a report that things haven't been this bad since the Great Depression. Keep in mind the first buyers want to buy your house at the best price from the start. So here is what you can do to make sure your house doesn't sit on the market for months:

Tip #1 - Be sensible about your asking price

Have at least three local real estate agents prepare a comparative marketing analysis. It will list the asking and selling price for home in your area. It will also list the size and amenities. If there is a small supply of similar houses, price your house for what others are asking. If there is a large supply, then you want to read the next step

Seek to generate greater interest in your house. Set your price 10% less than what others are selling for. If you do this, it raises your chances of receiving several offers on your property. If you must drop your price after it has been on the market for a while, make one large price cut instead of smaller cuts.

Selling your house on your own is a tremendous undertaking. It becomes even more challenging when the real estate market is more favorable to buyers like now. You must have the experience and the patience to weather the storm. Therefore, if you feel that you are unable to sell your house yourself, adhere to this next tip:

Tip #2 - Seek an experienced real estate agent

Selling today during this economic climate will require a great deal of marketing effort. Seek an experienced real estate agent to help you. You do not want to deal with an unseasoned agent. You want one who has been through downturns and understands what is required to close the deal. All too often, an agent will list your property without having your interests in mind.

The first impression is important, especially when it comes to selling your house. You house must have curb appeal to lure potential buyers. Make sure you take the time to clean, paint, and landscape. You only have ONE chance to make a first impression. Adhere to this tip to make a difference when your prospects enter the house:

Tip #3 - Stage your house for a good first impression

In this housing market, you must use all of the tools at your disposal. Hire a stager. Staging services have become popular with the rise in the number of house-selling shows on cable television. A stager will help to organize your house to make it more attractive. They will move your house away from the "lived in" look. They will get rid of the clutter, rearrange your furniture, and give definition to each room of the house. They will also provide you with alluring paint options. Stagers may charge a little as $200 for a consultation. A full blown staging plan may cost $1,000, but it is well worth it to help you receive peace of mind.

Tell us about your property now!

As was stated in the previous tip, you must use everything at your disposal to get your property sold.

Tip #4 - Money talks

Throw a little at prospects to catch their attention. Don't waste your time giving away cars or trips. You may look desperate. Offer to pay a portion or all of the buyer's closing costs. Or offer real estate agents and people who may refer prospects to you $1,000 if they send someone to you who eventually buys the property. Remember, there is probably a great deal of competition in the form of listings. Give people an incentive to buy your house or refer someone who will.

We have talked to many sellers over the past few months. The majority of them are "upside down". Being upside down means the person owes more on the house than what it's worth. So what do you do?

Tip #5 - How to handle being "upside down"

If you are upside down, you have options. They may not help you sell you receive money when you sell, but they will help you to receive peace of mind:

Sell the house on terms - You may sell your house via some form of installment sale (subject to the existing loan, land contract, or wrap around mortgage). You may also sell your house via a rent to own contract. Each method has their advantages and disadvantages.

Ask the lender to allow a "short sale" - A short sale is a sale that results in the lender receiving less than what is owed on the mortgage. Short sales have grown in popularity but keep in mind that they are difficult to do. You need an experienced person to talk to the lender. Also, nine times out of ten the lender will NOT allow the seller to receive money at the closing table. Just think, why would the lender want to allow you to receive money when they are discounting the loan.

Rent the house and weather the storm - You may decide to move out and move a tenant in. Charge the tenant a rent rate that is close to the monthly payment of your mortgage. If you have to lower the rent and pay a little yourself, it is well worth it.

There you have it. The five tips to help you sell your property. We hope you enjoyed them. Better yet, implement these tips as soon as possible so that you can get that property sold. If you have any questions about this message or any of the previous tips, e-mail us at CustomerCare@CashNowForYourHome.com or call us today at (888) 803-1392 ext. 1324. To get started on the road to peace of mind, tell us about your property now.

www.CashNowForYourHome.com is a network of private real estate investors. We buy property in any area and in any condition. We are able to close deals that may be hard to close or not attractive to close by most investors. We employ conventional as well as non-conventional methods to get things done. All of our methods are ethical and legal. We fully disclose all facets of the transaction so that you feel at ease. And we won't waste your time or your money. If we can't do the deal, we will tell you that we can't do it.

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Government may soon back troubled mortgage giants

By ALAN ZIBEL, AP Business Writer

WASHINGTON - The government is expected to take over Fannie Mae and Freddie Mac as soon as this weekend in a monumental move designed to protect the mortgage market from the failure of the two companies, which together hold or guarantee half of the nation's mortgage debt, a person briefed on the matter said Friday night.

Some of the details of the intervention, which could cost taxpayers billions, were not yet available, but are expected to include the departure of Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron, according to the source, who asked not to be named because the plan was yet to be announced.

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and James Lockhart, the companies' chief regulator, met Friday afternoon with the top executives from the mortgage companies and informed them of the government's plan to put the troubled companies into a conservatorship.

The news, first reported on The Wall Street Journal's Web site, came after stock markets closed. In after-hours trading Fannie Mae's shares plunged $1.54, or 22 percent, to $5.50. Freddie Mac's shares fell $1.06, or almost 21 percent, to $4.04. Common stock in the companies will be worth little to nothing after the government's actions.

The news also followed a report Friday by the Mortgage Bankers Association that more than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June.

That confirmed what investors saw in Fannie and Freddie's recent financial results: trouble in the mortgage market has shifted to homeowners who had solid credit but took out exotic loans with little or no proof of their income and assets.

Fannie Mae and Freddie Mac lost a combined $3.1 billion between April and June. Half of their credit losses came from these types of risky loans with ballooning monthly payments.
While both companies said they had enough resources to withstand the losses, many investors believe their financial cushions could wither away as defaults and foreclosures mount.
Many in Washington and on Wall Street hadn't expected Paulson to intervene unless the companies had trouble issuing debt to fund their operations.

This summer, Congress passed a plan to provide unlimited government loans to Fannie and Freddie and to purchase stock in the two companies if needed.
Critics say the open-ended nature of the rescue package could expose taxpayers to billions of dollars of potential losses.

Supporters, however, argue the Bush administration had little choice but to support Fannie and Freddie, which together hold or guarantee $5 trillion in mortgages — almost half the nation's total.
Representatives of Fannie and Freddie declined to comment on the government assistance plan.
Treasury spokeswoman Brookly McLaughlin said officials "have been in regular communications" with Fannie and Freddie, but refused to comment saying, "We are not going to comment on rumors."

Concern has been growing that a government rescue of Fannie and Freddie could not only wipe out common stockholders, but also be costly for scores of investment, banking and insurance companies that hold billions of dollars in their preferred shares.

Paulson has been in contact in recent weeks with foreign governments that hold billions of dollars of Fannie and Freddie debt to reassure them that the United States recognizes the importance of the two companies.

The two companies had nearly $36 billion in preferred shares outstanding as of June 30, according to filings with the Securities and Exchange Commission.

Mudd, the son of TV anchor Roger Mudd, was elevated to Fannie Mae's top post in December 2004 when chief executive Franklin Raines and chief financial officer Timothy Howard were swept out of office in an accounting scandal. Syron was named Freddie Mac's CEO in 2003, replacing former chief Gregory Parseghian, who was ousted in after being implicated in accounting irregularities.

He formerly was executive chairman of Thermo Electron Corp., a Waltham, Mass.-based maker of scientific equipment, served head of the American Stock Exchange and was president of the
Federal Reserve Bank of Boston in the early 1990s.

Fannie Mae was created by the government in 1938, and was turned into a shareholder-owned company 30 years later. Freddie Mac was established in 1970 to provide competition for Fannie.
A government takeover could cost taxpayers up to $25 billion, according to the Congressional Budget Office.

But the epic decision highlights the size of the threats facing the housing market and the economy. On Friday, Nevada regulators shut down Silver State Bank, the 11th failure this year of a federally insured bank. And earlier this year, the government orchestrated the takeover of investment bank Bear Stearns by JP Morgan Chase.

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U. S. House Price Decline Could Be Worse than Great Depression, Economist Shiller Says

Posted Sep 04, 2008 01:36pm EDT by Henry Blodget in Newsmakers, Recession

Eight years ago, Yale superstar professor and MacroMarkets chief economist Robert Shiller famously called the top of the stock market in his book Irrational Exuberance. Then, a year before the housing bubble peaked, he predicted the colossal bust we are now experiencing.

If you recognize Shiller's name, it’s because the Standard & Poor's/Case-Shiller home price indexes, which he developed with Wellesley College economist Karl Case, have become the nation's most authoritative source for home price trends.

In part one of my one-on-one with Shiller, we discuss the grim outlook for U.S. housing, which he tackles in-depth in his new book The Subprime Solution. Highlights of our first discussion include:

*Home price declines are already approaching those in the Great Depression, when they plunged 30% during the 1930s. With prices already down almost 20%, it's not a stretch to think we might exceed that drop this time around.

*There are about 10 million homeowners whose debt is higher than their home value, which has broad implications for how Americans feel about their wealth and spending habits (read: more pressure on consumer spending).

*The current hopeful consensus -- that house prices will bottom soon and then begin to recover -- is most likely a dream. Housing markets don't usually have "V-shaped" recoveries. And even if house prices stabilize in nominal terms, after adjusting for inflation, most homeowners will continue to lose money.

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Tough Ways to Boost Your Bottom Line

by Jeffrey Strain
Thursday, August 28, 2008

Faced with record high personal debt levels and ultra-low savings rates, it may be worthwhile for Americans to consider taking the hard way out of debt.

When people talk about getting their personal finances in order, they usually try to find the easy way to reduce debt and increase savings.

There are a number of steps you can take that are relatively pain-free and low-cost that will help get you on your way to a better financial position, but this is taking the long term approach. Little steps over a long period of time will add up to big amounts, but it's not the only way to achieve financial freedom.

Another option is to take the hard route.

Instead of making small changes, make big changes which can have a large impact. The advantage is that you can put a huge dent into any debt you might have or supercharge your saving rate, with large increases over a short period of time. Here are 10 hard ways to get your finances in order.

1. Downsize your house. Instead of buying the biggest house you can afford, live in the smallest house you can find. Sell your current house and buy one that is half the size or even smaller. Challenge yourself to find the smallest space that you can stand to live in.

Take a chapter out of your college days and think one-bedroom or studio apartment (or a lot of roommates). Though it's not easy to live small when everyone around you is living large, your finances will be healthy and well in no time as those around you struggle to make their mortgage payments.

2. Save 50%+ of your income. Saving 10% of your income is the common recommendation, but you can do a lot better than that. Shoot for saving 50% or more of your take home pay. With a bit of effort, anyone can save 10% of their income, but it takes discipline and effort to live on only 50% of your income. By doing so, you will ensure you don't have any financial problems and that you can retire years, if not decades, earlier than your coworkers.

3. Eliminate your gadgets. Think about this for a second: 30 years ago you didn't have Apple iPods, cellphones, computers, DVD players and a lot of the other gadgets that are deemed "essential" today. Throw in the big, flat screen TV and get rid of them all.

You can get your news from a newspaper at your local library, where you can also check email or use the computer. Not only will you save hundreds a month on subscription costs, you'll save thousands of dollars a year on hardware costs. While there is no doubt that many of today's gadgets are convenient, it is readily possible to live without them if you are committed.

4. Eliminate your car. The truth is that you don't really need your car. Yes, it's a lot more convenient than not having one, but it's possible to get by without one. You will have to adjust your schedule around others who do have cars and learn to love public transportation.

On the occasions when you do need a car, renting one is still possible. Not only do you eliminate car payments, gas costs, repair bills and insurance costs, the extra movement will slim you down while it fattens your wallet.

5. Only buy used. New is nice, but there are very few items that you need to purchase new. Learn to buy everything you want used or don't buy it at all. eBay, Craigslist, second-hand shops, flea markets and garage sales will be your new shopping grounds. This should reduce your spending by 50% or more and with a bit of work and a good eye, you'll be the only one to know you didn't pay retail prices.

6. Buy one, donate three. You know that you have too much stuff and your closets and other storage areas prove it. If you really want to purchase something, vow to donate, sell or get rid of three items for every one that you buy. If you want that new shirt, those new shoes or a new book, you have to give up three of each to get it.

No, it's not easy giving things you have up, but this will ensure that you only buy things that you really want and avoid gathering that 80% of junk that most people buy but no longer use.

7. Make Christmas a no-spend holiday. Decide that you are opting out of the commercialism of Christmas or whatever winter holiday you celebrate and turn it into a no-spend holiday. Instead, go back to the roots of what the holiday is supposed to mean. It will not be easy and friends and family may not understand, but not only will you save a bundle of money, you'll have a lot less stress while getting more meaning out of the holidays.

8. Don't eat out. That's right. Breakfast, lunch and dinner are all made at your kitchen at home. No exceptions for snacks (no trips to the bakery or the office vending machine) and coffee (sorry Starbucks) as well. If it goes into your mouth, it is prepared by you from your kitchen. This means putting aside time to prepare meals and snacks and taking everything with you when you leave your house. Though not easy, the results will dramatically improve both to your health and your pocket book.

9. Don't pay for entertainment. There was a time when we had to entertain ourselves and although it might be difficult to give up paid entertainment, it's possible to go back to those roots and find your entertainment for free. You likely have to look a little harder, be a little more creative and be a bit more active, but there are plenty of opportunities to trade in paid entertainment for activities that are free -- walks, hikes, bike rides, concerts in the park to name just a few.

Getting your entertainment at no cost means more effort on your part, but you'll find things that satisfy your interests much more while also giving a boost to your bank account.

10. Start your own business. More work after work is not what most people would consider easy, but it's a great way to help your finances. It means working a double shift; eight hours at your current job and then when you get home, another eight on building your new business.

It takes time and patience to build a new business, as well as a lot of effort, so pick one that you enjoy. Whether your part-time business makes a little to supplement your regular income or grows so that it's making as much as your regular job, it will help your bottom line.

Upon reading this list, you probably decided that all of these suggestions are impossible for you -- before even thinking of a strategy on how each could be accomplished.

Again, these are hard ways to improve your finances, but adopting any of them can change your financial outlook for the better both quickly and dramatically.

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