This situation is called being "upside down," which means that you owe more than the house is worth. Selling your home when you are "upside down" is called a "short sale."

This is not a new practice. It has been used before but never without a buyer. Most deals fell through because the paper work took too long or because lenders, servicing firms and mortgage guarantors rejected the sales price. For these reasons, "short sales" have a bad reputation among real estate agents.

Continue reading Fannie Mae's new program. Is this a winner or what?

Fannie Mae's new program. Is this a winner or what? originally appeared on BloggingStocks on Mon, 12 Jan 2009 14:15:00 EST. Please see our terms for use of feeds.

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

In light of the short-selling ban, someone recently asked me for my opinion about short selling. Personally, I'm grudgingly accepting of the practice, but I believe that some serious changes need to be made. I believe that the practice of short selling should be made harder to engage in, more expensive to execute, limited in duration, and heavily scrutinized.

The uptick rule is fine, and it never should have been suspended, but I feel that it falls short of the mark. Bear raids can still be orchestrated in spite of uptick only buys. Purchasing on the uptick simply slows the process a little. A system must be developed by which the practice of bear raids is effectively terminated.

When I researched opinions and viewpoints on short selling, it became quite apparent that the writers I had encountered were not supporting short selling nearly as much as they were simply railing against a short-selling ban. Not one person actually made a case for why the practice is essential to market health. The closest I came to finding an eloquent argument in favor of short selling was an article by Paul R. LaMonica, editor at large, CNNMoney.com. Though Mr. LaMonica didn't really explain to me why I should be shorting stocks to benefit the markets, he did quote the SEC on 3.5 reasons why shorting might be beneficial.

Continue reading Makeover needed: Short selling stocks

Makeover needed: Short selling stocks originally appeared on BloggingStocks on Fri, 24 Oct 2008 10:05:00 EST. Please see our terms for use of feeds.