Is it any wonder that most people don’t trust the real estate industry?
Just consider the recent investigation of NRP and ProPublica. The two news agencies found that Freddie Mac purchased billions of dollars worth of complex mortgage-backed securities that only profit if borrowers remain trapped in high-interest-rate home loans.
Freddie Mac today holds $5 billion worth these securities. Its regulator, the Federal Housing Finance Agency, has since requested that Freddie Mac stop purchasing these securities. Freddie Mac in December agreed to this request.
Now, what does this story say to the homeowners across the country who want to refinance to mortgage loans with lower interest rates but have been denied? It says that the game was rigged against them from the start.
The Freddie Mac story is just one more blow against the real estate industries. The reporters who cover real estate — people like me — know that the vast majority of professionals doing business in the industry are smart and hard-working. But members of the general public? They have a far lower opinion of the industry.
I’d say its similar to the feelings that consumers have toward lawyers, car salesmen, contractors and, yes, journalists.
Freddie Mac certainly hasn’t helped the image of the real estate industry. And don’t think that members of the public will differentiate between those real estate professionals who work in residential and those who work in the commercial fields.
The Freddie Mac story, simply, is one that the real estate industry desperately doesn’t need as it tries to recover from some of the most difficult years in memory.
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