Officials, elected and otherwise, of our Federal Reserve Bank, and of our Federal Government, are convening daily to devise strategies to bail out our ailing financial institutions.

It’s amazing to see the list of companies in trouble or shut down. Lehman Brothers, Merrill Lynch, AIG, Countrywide, and Washington Mutual are among the largest and best known companies that have ceased to exist in their previous form, thanks to the crushing effect of bank foreclosures nationwide, and to the high-risk financial shenanigans played by these “titans” of Wall Street.

How does all this affect your home? Your neighborhood has likely experienced a short sale or two recently. And no, No community is an island – prices have fallen everywhere from the peak of the market. And foreclosures are a large and growing factor everywhere across the country.

It’s a buyer’s market, for sure. But if you need to sell your home, or another property, call us at (949) 240-5892, or contact us via email. We’ve been through market cycles like this one before. We know how to maximize your equity through proven strategies designed for today’s challenging real estate market.

“Love where you live…live where you love!
It all begins at home!”

Earlier in the year, the investment firm, Bear Stearns, was “bailed out” through actions of the Federal Reserve Bank and the U.S. Treasury Department. More recently, and with direct impact upon our real estate market, the Federal Government took control of both Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are (were) what is (was) known as GSE’s, or governement sponsored entities. In other words, these GSE’s behaved like private corporations (badly), but were implicitly backed up by the strength and credit of our Federal Government. So the new owners of Fannie and Freddie are, you guessed it, you and us!

This week brought even more turmoil, and finally, some “resolution” as well, when the Treasury Secretary announced the planned formation of a government entity to purchase and process bad loans, similar to the Resolution Trust Corporation that was formed after the savings & loan debacle in the 1980′s. How does all of this relatively bad news all affect your home’s value?

Inventory of homes for sale on the market is high, but what’s worse, the inventory is dominated by bank-owned foreclosures and properties subject to lender short-payoff (more on “short pays” in a later column). Despite the argument that Uncle Sam (all of us, again) should not be in the business of buying bad debts from dumb lenders, the efficient disposition of these loans and properties should help to lessen their impact on our residential resale market in Orange County. The sooner we get back to a “normal” market of buyers and sellers, helped by lenders who happily make loans to qualified purchasers, the better off we will all be as homeowners.