This just in...Fannie Mae is updating the policy that pertains to multiple mortgages to the same borrower. Fannie Mae’s current policy limits the number of one-to-four unit financed properties in which the borrower may have an individual or joint ownership interest to four financed properties when the mortgage being delivered to FNMA is secured by an investment or second home. FNMA is modifying this policy to allow investor and second home borrowers to own Five to Ten financed properties if they meet certain eligibility, underwriting and delivery requirements. Reserves will play a vital role in this new change so before you investors start looking call me first and we will see if they will qualify.

This just in (last week)... The Financial Times ran an op-ed that pretty much confirmed what I've been saying all along: The constant barrage of negative news creates adverse feedback loops that overwhelm the psyche. The most immediate way to thwart these loops and improve psyche is simply turn off the news, or at least throttle back the number of times you read the same account. Another way to improve psyche is not to get too caught up in the here and now. People tend to absorb news as if it actually happened to them or will happen to them in the near future. Fertile minds tend to conjure numerous scenarios, most of them bad. They also tend to extrapolate (this was on my word of the day calender yesterday) today into infinity. Life is not the movie Groundhog Day. Trends do not last forever.

I hate writing this... In the 5 previous years that the Steelers won the Super Bowl (1975, 1976,1979, 1980 and 2006), the S&P 500 has been up an average of +25.6% on a total return basis (source: BTN Research). That's good news but I hate writing this because it's about the Steelers(did you also know that the Steelers are the only team in the NFL that does not have cheerleaders).

Better than a stick in the eye...Forget everything I just wrote in the I hate writing this paragraph above (except for the cheerleader info) because in the last 6 months of 2008, the median sales price of existing homes sold in the USA fell by 18%. In the last 6 months of 2008, the median sales price of new homes sold in the USA fell by 11%. In the last 6 months of 2008, the total return of the S&P 500 stock index was down 28% (source: National Association of Realtors, Census Bureau, BTN Research).

Tying it all together... SO stay positive (second paragraph) because buying real estate is still the way to go and a great way to diversify your porfolio. With the great news of Fannie Mae (first paragraph) investors need to come out and play in this great market OR move-up buyers can think about turning their now principle residence into an investment property and take advantage of the lower interest rates for owner occupied homes.