investing.meetup.com – New York Investing meetup organizer Daryl Montgomery discusses what happened to Fannie Mae and Freddie Mac during the subprime crisis. The New York Investing meetup is a volunteer group of 1800 independent traders and investors that provides unbiased stock market education and analysis. We also have an associated blog, “The Helicopter Economics Investing Guide” at: nyinvestingmeetup.blogspot.com
08/23/2010 – www.RonPaul.com Let the Housing Market Normalize! by Ron Paul Recently there have been some encouraging signs that Congress is finally willing to admit what should have been evident two years ago. Even after a $150 billion bailout, Fannie Mae and Freddie Mac are still bankrupt and should be abolished. Indeed Rep. Barney Frank, a longtime champion of Fannie and Freddie has made a few statements alluding to this and I have signed on to a letter asking him to clarify his remarks and hold hearings on this topic. There seems to be a growing consensus in favor of abolishing Fannie and Freddie. This is the good news. The bad news is that instead of simply returning to the free market, Fannie and Freddie will probably be replaced with something equally damaging, and at this point we can only guess what that will be. One possibility is that instead of these two giant Government Sponsored Enterprises (GSEs) the government will deputize thousands of smaller banks to do the same thing — that is to securitize mortgages with taxpayer guarantees to encourage lending that otherwise would not happen. In other words, there will be a myriad of smaller Fannies and Freddies, and government involvement will reach even deeper into the financial sector. Fannie and Freddie, and thus the taxpayer, has an alarming $5 trillion exposure to the mortgage market. To some, spreading out this risk might seem tempting, and a smart thing to do. But the fact remains that if a bank expects to …
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www.themortgageadvantage.com Discussions are under way to restructure the $11 trillion mortgage industry and wean Fannie Mae and Freddie Mac’s dependence from Uncle Sam’s battered pocketbook. Fannie was created in 1938 after the collapse of the our housing market during the Great Depression. Freddie was established in 1970 with a similar charter. They buy loans from banks and lenders refilling their coffers, allowing an uninterrupted flow of mortgage lending. But before Fannie and Freddie purchase the mortgages they must meet their guidelines. Our legislatures are pushing to give the largest purchasers of home loans back to the private sector: the big banks. That’s right boys and girls, the same entities that caused our Mortgage Meltdown. In 2004 Bear Stearns actively marketed its subprime mortgage guidelines. 100% , stated, investment, 480 credit scores (okay that is an exaggeration, but you get the drift). They were the wunderkinds of creative underwriting. But that was before it’s fire sale to J. P Morgan Chase in 2008. Countrywide soon led the loosey goosey, anything goes cash hungry bandwagon. (You’re a felon in prison? Do you have a PO Box we can use for an address?) Wall Street demanded mortgages and to continue to feed the mortgage-hungry beast, underwriting became more and more about the distribution of funds instead of quality. Wall Street (and our government) put pressure on Fannie and Freddie to stop being such fuddie duddies. Our protectors of our mortgage …
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www.FutureMoneyTrends.com The dollar http Back to school sales www.oregonlive.com Dim Holiday season www.baltimoresun.com Retirement myth www.usnews.com Consumer Spending www.nytimes.com Credit Card defaults www.financialweek.com Option Arms us.ft.com Fannie and Freddie www.marketwatch.com CHICAGO (MarketWatch) — The rate of mortgages entering foreclosure hit another record high in the second quarter, as did the percentage of loans somewhere in the foreclosure process, the Mortgage Bankers Association reported on Friday. The delinquency rate, which measures mortgages that aren’t in foreclosure but have at least one overdue payment, also was the highest ever recorded in the MBA’s quarterly survey.