Esko Kiuru - Las Vegas NV Mortgage Consultant

The two dominant mortgage market makers have been struggling for years with all sorts of problems, most of them of their own making. Heavy losses led to the Federal Housing Finance Administration placing them under conservatorship about a year ago. U.S. Treasury Department is now keeping the two GSEs, or Government Sponsored Enterprises, afloat by buying their preferred stock.

Fannie Mae and Freddie Mac may soon be extinct anyway. Moody's Investors Service feels in its latest global banking analysis report that their days are numbered as losses mount. It could happen inside the next 18 months, it predicts. And they are not alone in saying something like that. Besides, their names are so tarnished nowadays that the best course of action might just be to dissolve them.

The mortgage marketplace is heavily dependent on these giant GSEs, so should they be put out to pasture a new agency would have to replace them. The preference ought to be to have just a single one, so it would be easier to control. Its mandate could be adjusted from what Fannie and Freddie have now and its organizational structure might turn out different, too. But it would still be the key mortgage investor on the secondary market.

Fannie Mae and Freddie Mac would be facing a far different future if they had been properly managed and more importantly, if Congress and the government had kept a closer eye on them. To create a new entity with a new name in their place will give the appearance of a fresh start but will likely be only a temporary solution if the oversight lacks the necessary tenacity, like it did in the recent past.

Las Vegas condominium market has fared as poorly in recent years as the battered single-family sector. The malaise is afflicting everything with the condo banner hanging over it; the luxury high-rises, the contemporary mid-rises and the homey low-rises. A host of units on Strip glass towers have gone unsold for a long while, dating back to when the bubble started noisily leaking air. The ones, easily hundreds, that have deposits on them haven't closed either because mortgage financing has pretty much dried up. Moreover, the drastic value erosion has caused many would-be buyers to balk at finalizing their purchases.

CityCenter condos, notably Veer Towers, Vdara Condo Hotel and The Residences at Mandarin Oriental Las Vegas, are in the middle of that type of a row. A while back MGM Mirage stood rather firm at the original price structure despite loud appeals that they work with the buyers. But the gaming giant's mind has changed recently.

These luxury condominiums at CityCenter will now be reappraised, while the details of how far they will go are still to be worked out. If the prices will be adjusted strictly to the current real estate market, the cuts will be substantial. It's fair to assume that they won't go quite there, probably stopping somewhere around the lower half of the range. Regardless, it can still be beneficial to both sides.

Mortgage availability is also on the table. MGM Mirage is engaging a number of banks to get them to offer financing, likely holding talks with the same lenders that are funding the entire $8.5 billion project. It appears it would be in the banks' best interest to play ball and thus assure that at least a good portion of the condominiums would sell and subsequently make the development more stable. This approach was actually adopted not so long ago at the Palms Place Las Vegas, although the success rate there is still to be established.

MGM Mirage is also listening to its existing resort clients, as many of the condo buyers are long-time visitors, okay players, with a decent or better financial background. Clearly, the decision to readjust the prices is more than a real estate market necessity.

Center for American Progress Action Fund, U.S. Senate Majority Leader Harry Reid, D-NV, and University of Nevada, Las Vegas are the hosts for this one-day gathering here in Southern Nevada. It's set for Monday, August 10, 2009, starting at 10:00 AM at UNLV's Cox Pavilion. Click here for more info.

National Clean Energy Summit 2.0: Jobs and the New Economy, that's the full title for the event, aims to stimulate debate over the deployment of clean energy, energy efficiency, good job creation, advances in energy independence and creation of economic prosperity for Nevada, the country and the entire world. That is a lot of territory to cover in one day, so hopefully they get as many ideas as possible out there for discussion.

Las Vegas is a fitting location for the summit. Nevada has an ample supply of various clean energy sources, such as solar, wind and geothermal. It's there to be harnessed and put to efficient use. Las Vegas is still pretty much a one-industry town and the current recession, led down the slippery slope by the housing and mortgage mess, is now pointing that out very clearly. It could embrace this clean energy initiative and broaden its economic base with it. It could become at least a major regional player in the field, if not more than that. It could turn into a national leader in this worthy effort.

Former Vice President Al Gore, U.S. Energy Secretary Steven Chu and energy expert T. Boone Pickens are scheduled to participate, among a host of other industry leaders, policy experts, scientists and public officials. This is a chance for everyone who is interested in advancing the clean energy platform to get involved and join the conversation.

HomeSteps, the real estate sales arm of Freddie Mac, just introduced a new program in an attempt to thin its inventory of agency-owned homes, in other words homes it has foreclosed on. In this demanding housing environment it predictably has quite a few of them available for purchase and has decided to do something meaningful about it.

HomeSteps has dubbed the campaign SmartBuy. Someone at Freddie Mac must be really good at coming up with catchy names. Anyhow, it runs from July 17 to October 31, 2009, unless extended. It's good for single-family homes only from HomeSteps inventory and it must be the buyer's primary residence.

Freddie Mac has included two nice incentives in the SmartBuy sales promotion. The first one is the 2-year comprehensive home warranty that covers the usual items that we see in other warranties. It never hurts to have one in the early years when budgets can be tight and making mortgage payments could become a challenge in case something major breaks down. If the homeowner wishes to continue the coverage after that, he can do so on his own.

In the second one Freddie Mac offers to pay up to 3.5% of the contract price in buyer's closing costs. That's not bad, either.

For additional info visit HomeSteps or dial 800-972-7555.

Las Vegas housing market, for instance, is awash in foreclosure listings and to get an edge here something like this will help out. And of course, the properties for sale ought to be priced right. Moreover, it's an indication that Freddie Mac, among all the other lenders with a mountain of non-performing real estate, is really starting to work on lowering its REO, real estate owned, database.

Las Vegas housing market alone would be a big beneficiary if it did happen. Southern Nevada has already seen solid gains this year in sales thanks in large part to the first-time buyer tax credit of $8,000. This incentive is set to come to an end December 1.

NAR, or National Association of Realtors, and the mortgage industry are currently working on Congress to keep it going well into 2010. It has such a good track record, so why not. They have two other worthwhile ideas in mind as well.

The tax credit ceiling ought to be hiked to $15,000 is one of them. If it were to go that high, it would really give the real estate market some kick. Of course this would cost the U.S. Treasury another chunk of money, so there could be some resistance to it. But on the other hand, it might be better spent this way than hand anything more to banks that have largely been using bailout cash for just about everything else but help the housing industry. In other words, make mortgage funding more available to borrowers.

The other is to allow every homebuyer under this tax credit umbrella. Not just first-time buyers. There is no doubt that this would give the housing market another serious injection of valuable medication.

The real estate market is a key element in the entire economy that is still wobbling along. In light of that, it's predictable that some sort of a stimulus effort will be enacted before too long and hopefully it includes some good news for the housing sector.