and the credit markets froze, builders and would be new home buyers found themselves paralyzed and unable to access cash.  Buyers found it nearly impossible to access a construction loan.   Builders have found it difficult to finance operations.  Companies that could quickly redirect and pull in operations made strategic decisions looking to the future which meant an ability to bank on themselves.  Consequently, the larger companies have been hoarding cash to build their reserves.  J.P. Morgan reports that in 2008, the ten major companies had $616 million in cash reserves compared to current reserves, which top $1.2 billion.  For an industry used to running on credit, the ability to build cash reserves so dramatically is impressive.

New legislation passed liberalizes the carry back period for claiming losses from two years to five years.  The news of this legislation has been met with overwhelming support from the National Association of Home Builders to Wall Street.  This segment of the real estate market has been hit so hard by the recession impact on cash flow; many expect that this legislation will allow many struggling builders (small and large), to have a shot at survival.

Fannie Mae announced this week its "Deed for Lease" program to stem the continuing onslaught of foreclosures.  Fannie Mae acquired 57,000 foreclosed homes in the first half of 2009.  This program targets homeowners who can demonstrate that they can't afford their mortgage and don't qualify for a loan modification program. The rent would be less than the mortgage payment.  While some are criticizing the program, many industry analysts see this as positive because the real estate market is flooded with foreclosures which are continuing to depress values.  Additionally, the homes will hold greater value occupied than vacant.  In turn, the neighborhoods will fare better than the blight foreclosures tend to bring.