Bank Losses Continue, GMAC POST 3.9 Billion Dollar 2nd Quarter loss.
For Buyers in the entry level market this is almost a non event. To the larger loan borrowers those in the JUMBO market this explains why that segment of the market is still tight.
GMAC who is now an independant bank after the break up and bankruptcy of General Motors announced today that they lost 3.9 BILLION dollars in the second quarter of this year. This includes both auto and home losses as GMAC owns multiple residential lending units.
The reason that this does not effect the entry level is that most entry level borrowers obtain loans backed by the Governement throught FHA or Fannie Mae or Freddie Mac who are not owned and operated at the instruction of the Government.
If it the hope of many in the Real Estate Market Place that soon the Governemet will come up with a plan to loan money to the larger purchaser “Jumbo Loans” or even those jumbo loans that are in default will have an almost impossible time finding a loan.
History has proven that you can not stop the flow of any part of the market and maintain balance. Hitting the wealthy home owner hurts us all. The market is relative if the top end of the market is hit so is the bottom end.