Washington Report: New Congress and Fannie Mae
by Kenneth R. Harney
<!-- Body -->The Obama administration still has three weeks before taking over in Washington, but the new Congress arrives in town much earlier - January 6th.
Besides a massive economic relief package -- which is expected to cost anywhere from $800 billion to $1 trillion and focus on job-producing projects like repairing roads and building bridges - there's another key item on the agenda: What to do with Fannie Mae and Freddie Mac.
Both companies are mainstays of the U.S. home real estate market, accounting for more than half of all new mortgages. But both have come to financial grief and are operating under "conservator" arrangements run by the federal government.
That's not technically bankruptcy reorganization, but it's pretty close.
Given Fannie's and Freddie's importance to housing and the mess they're in, Congressional Democratic leaders have already begun discussions on what to do with them.
Unlike the last Congress, where Democrats ran the committees but didn't have the votes to overcome Republican opposition in the Senate, this year they pretty much can rule the roost.
So the ideas they're discussing now have special importance for home buyers, sellers, builders, Realtors, investors and others involved in real estate.
Here's a quick overview of some of the possibilities:
One option is to combine the two companies into a single financial entity. After all, they both perform similar functions, so why do we need two?
A second option is to slice off the public-service functions of the companies -- support for low and moderate income single and multifamily housing -- and turn them into some form of federally-controlled corporation.
At the same time, the purely private market operations of the companies could be spun off and sold to private investors. Here we're talking about buying mortgage bonds and loan pools from banks and other lenders, and trading them.
According to the Washington Post, Lawrence Summers, the former Treasury secretary who's slated to be President Obama's chief economic adviser, favors cutting Fannie and Freddie into purely private and public pieces, with the federally-controlled portion assigned the job of guaranteeing mortgage bonds to keep money flowing into the home loan sector.
Still another concept under discussion would to turn Fannie and Freddie into public utilities. That means they'd be like the electricity and water companies -- privately-run but serving essential public purposes and heavily regulated to make sure they do what they're supposed to.
Wherever Congress comes down on all this, one thing's for sure: Fannie and Freddie are going to look and perform very differently, sooner rather than later.
For taxpayers and borrowers, that probably will be a good thing.
Published: December 29, 2008
Thomas Merical
http://www.findahomesellahomenow.com/
Don't Miss Tax Deductions On Your Real Estate Investment
by Phoebe Chongchua--RealtyTimes<!-- Body -->
There are an estimated 11 million real estate investors in the U.S., according to IRS data. However, not all of them chose to be a real estate investor. Some accidentally became investors due to market conditions. "There are people who have bought property for flipping and now they're kind of stuck with them and in some markets they can rent them," says Narinder Sandhu, founder of T-ReX Global. It's this group of people that could be losing money, especially if they aren't aware of how best to manage their real estate investment. "One of the most important things in real estate investment is taking advantage of all of the tax benefits that are available to [investors] and the write-offs," says Sandhu. Sandhu says that real estate has numerous tax benefits, but many investors miss out on the tax-saving advantages because they are not prepared to properly track their investment. "In order to take advantage of all those benefits you really have to track your income and expenses," says Sandhu. His company T-ReX Global was started to help real estate investors not lose out on money. The former VP of the Small Business Division at Intuit (The makers of Quicken, QuickBooks and TurboTax) says he saw a niche market that needed help. "It's a very simple application. It's like Quicken but is designed specifically for real estate investors and it's an online application whereas Quicken has been a desktop application," says Sandhu. The program helps investors make sure they don't miss out on money-saving opportunities. "It allows you to track your income. It also gives you a lot of write-offs that most people miss," says Sandhu. Sandhu says the program takes very little time to get started and only minutes each month to track your property's income and expenses. Another added benefit is that the program produces a rental property Schedule E form. For more details visit, trexglobal.com. Sandhu says no matter which program you use to manage your real estate investment you should look at these five areas to make sure that you're not losing money on your real estate investment. Published: December 26, 2008
Thomas Merical
http://www.findahomesellahomenow.com/
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