John Sauro said people are getting mortgages today and that his company is re-educating home buyers and home owners with regards to today's qualifications to get a loan. Income verification, 5-20% down payments and good credit.

He went on to explain the role Fannie Mae, Freddie Mac and FHA are playing in the markets.  "FHA is being viewed as the new sub prime mortgage and Fannie and Freddie are buying only conforming loans and loans up to $729,750 temporarily as part of the government stimulus package from earlier in the year."

Sauro further explained the difference between Fannie Mae loans and the secondary market Jumbo loans and how while there are 30 year fixed rate Jumbo loans available, the rates for those loans currently range between 8-9%.  However, the rates for 3,5 & 7 year adjustable are very attractive.

When asked about the possibility of bailing out homeowners facing foreclosure, Sauro said, that while he has never been for a bailout of any kind, he believes that its now necessary due to the current market conditions. He also said that it is unfair to those homeowners who have taken on second or third jobs in order to keep up with their mortgage payments. 

When asked about a bailout for those facing foreclosure and if this will stop the slide of the real estate market, Sauro replied No, I don't believe that this alone will keep real estate values from falling but that the bailout is only one necessary component and more needs to be done. He said he is surprised that the government and the two presidential candidates have not proposed for the government to backstop real estate property values with a tax credit or tax write off  whereby the government would guarantee the value of a home by offering a tax write off over a five year period of up to 10% of any loss in value.  And in fact because of this guarantee people would not be afraid to buy a new home if the reason the were not buying was due to home devaluation, therefore the government would never have to actually pay out anything.

Kathleen Hays said John should write a letter to those in government with his ideas.