Beating Broke

Personal Finance from the Broke Perspective

Feds Take Over Freddie and Fannie

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Mortgage giants Freddie Mac and Fannie Mae will be placed into a conservator-ship by the Feds.

The plan, which was delivered by Treasury Secretary Henry Paulson and James Lockhart, director of the Office of Federal Housing Enterprise, places the twin mortgage buyers into “conservatorship” to be overseen by the Federal Housing Finance Agency. Under conservatorship, the government would temporarily run Fannie and Freddie until they are on stronger footing.

“We examined all options available, and determined that this comprehensive and complementary set of actions best meets our three objectives of market stability, mortgage availability and taxpayer protection,” Paulson said.

Both Executives have been demoted and replaced.

Yet another in a long line of Fed takeovers.  And, unfortunately, another blow to an already weak economy.  Freddie and Fannie aren’t going under, but a takeover certainly shows their weakness and what could have been an impending failure.

I still don’t think that there is anything to worry about and we’re not headed into another great depression or anything.  What we all need to realize is that in the last 5-10 years, there were a lot of really stupid loans being made (and taken) on homes.  It created the housing bubble, and that bubble is still bursting.  In the end, there will be a huge number of foreclosures and a serious cutback on new home building.  But the thing to realize is that there are plenty of people that have the money to buy those foreclosures and resell them.  Eventually, the market will come back around, we just have to get past the aftershocks of the bubble burst.

Know Your Stuff – Home Inventory Software

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If you own a home, you know that you quickly accumulate lots and lots of stuff.  If you were to ever have a fire or a flood, it could be hard to prove to the insurance company what you had and in what condition.  In fact, if you have a fire and can’t prove you had it, they might just not pay you for it.  One of the best ways to prevent such a disaster is to complete a home inventory.

Ideally, a home inventory will include an itemized list of your possessions that will include serial numbers, model numbers, and replacement value.  It should also include pictures of the items at the least and a video of the items if at all possible.  A home inventory is something that every homeowner should have.

The more industrious of us can easily put together something with a spreadsheet and some archived pictures and videos.  The less technologically inclined might need a little help.  And a little free help is always good!

The Insurance Information Institute has a program designed for just such a solution.  The Know Your Stuff Home Inventory Software is a free download.  It includes a quick wizard for creating your room-by-room inventory and then gives the ability to attach photos to each item.  It also allows for attaching a digital copy of your receipt to the item for quick and easy value proof.

Once you’ve added all your possessions, you have several options for saving and archiving your inventory.  The simplest being a quick save to your harddrive or a print out that gets placed in a safe deposit box or safe.  They also allow for the ability to save the inventory to a 3rd party archiving system, but that carries a fee as well.  If you already have a offsite backup system in place (you should if you have anything important like a budget on your computer), like Mozy, then you can simply save the file to your hard drive and then have your current system back up the file.  Easy as pie!

Don’t forget to take your completed inventory into your Home Owners insurance agent to discuss your coverage and make sure that you have enough insurance to cover your possessions!