Posted on 12/14/2011 2:22:08 PM PST by JNRoberts
The Fannie model worked for over 50 years. And the Freddie Model worked for decades.
NOt sure if you are just trolling FR or not....
There are alternatives to FHA and F&F,
you could change origination laws and regulations easily to reflect Canadian, Danish or Belgian mortgage laws.
you could simply change FHA loans to reflect default risk due to income loss through UE or illness. Even adding points to require UE and disability insurance for FHA loans and conforming loans backed by F&F would do wonders.
you could turn to a soviet system.
you could enter into a system as described in the book 1984 where incomes dictate class and geogrpahic segregation in housing.
you could dismantle F&F and shift the assets to a truly Federally backed Agency or Department.
the Federal government could also implement onerous regulations on the residential and multifamily construction industry that would require Federal approval for all new building projects.
The fundamental models of F&F haven’t worked since the real median wages of US households stagnated starting in the mid 1970’s.
The F&F model doesn’t work during periods of stagnant new household formation.
The F&F model doesn’t work now due to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and shifting job markets.
The very conceptual framework of the “home ownership society” has failed, F&F were the major policy tools of the American regime to enable the entrapment of American wage earners into geographic cordons...
F&F only worked due to the labor market conditions in post-WWII America and the utter devastation in Europe’s industrial capacity. As the US continues to lose overall world marketshare in industrial production there will be ever diminishing needs for property values to be priced at levels above the immediate price point availability to the working wage earners in the country.
F&F only worked due to the labor market expansion of he baby boomers, if the RRE market stagnates due to a loss of FHA backing, it allows the younger generation to buy homes at market clearing prices. F&F as it stands now is eating the young in this country.
F&F created the second largest financial bubble in the history of the world and was a contributing factor for the largest financial bubble in the history of the world. The entire bubble paradigm that F&F rode in on has turned to a new synthesis that looks very much like the problems seen in Japan.
Houses made of tickytack is no way to finance an empire.
Bachmann's housing crisis answer in a recent debate was to look into the camera and pander to mothers. It was sickening and substance free.
>>>Truly you are both a pioneer and a legacy in the sex toy industry.>>>>
A response from someone with a clear and thorough understanding of housing finance and secondary markets.
Canadians get along fine without anything like Freddie and Fannie. In their best years their positive effect was estimated to be something like 1/4 of 1% of a savings on mortgage rates for qualifying mortgages. There was no reason to have taxpayers subsidize those mortgages then and there’s even less reason for the programs now that they are such costly failures.
Betcha a million bucks its a Fannie or Freddie loan.
>>>When I bought my house in the early 80s, I made a down payment in excess of 20% of the purchase price. The house was mortgaged as security; and I had a job that paid me about five times the annual payment required to service the loan.>>>
And if you had a fixed rate loan and it was within the GSE limits, your loan was sold to the GSEs so your lender could get their money back to go out and make more loans.
And they kept the servicing so you were never even aware of your loan being sold, how many times, and to whom.
But most people have no clue on how the mortgage finance and secondary markets work and how important the GSEs were and are. They just talk like they know and end up looking like the fools they are. (I don’t mean you)
Elaborate...please.
The traditional mortgage note holders were S&L’s and banks, but now there’s a hold developed securitization market the does in effect the same thing Fannie and Freddie were doing.
>>>Betcha a million bucks its a Fannie or Freddie loan.<<<
I hope he doesn’t bet you because he will most likely lose. And Fannie and Freddie didn’t ruin the economy. They were FORCED by Barney Frank and Chris Todd and the Libs to make loans to people who had no business getting loans and people , Americans LIED on those “low doc” “stated income” “stated Asset” mortgages. Just about every loan I ever saw......thousands...were all lies. And they know it. But you can’t say it.
Instead you have fools like humglgunner, ignorant fools who know as much about the GSEs as I do about lasik surgery.
That crap makes me want to find the grave of John Maynard Keynes so I can dig up his corpse and kick its ass.
Huntsman, who probably has the best economic policies, has proposed privatizing them.
Sorry, but you forgot one small statistic in your list.
The F&F model worked (Fannie from 1938) to about 2004, and Freddie from 1970 to about 2004. Over 60 years and over 30 years respectively. Thank you though.
I put 20% down in the 90’s, which allowed me to avoid PMI. Because it was a conforming mortgage that went through Fannie, I probably had a hair lower rate than I’d have paid otherwise (like a ‘jumbo’ of the time)—no big deal.
I’m sure by the time I post this lots of people will say “of course there is. It’s the free market!!!!”
Go to YouTube and search “Free to Choose” or Milton Freeman and educate yourself a bit. Sheesh.
>>>Huntsman, who probably has the best economic policies, has proposed privatizing them.>>>>
I would have one question for Mr. Huntsman. Please identify the investor that can either and or purchase and or guarantee TRILLIONS of dollars in Fixed rate mortgages and providing BOTH the investment grade guarantee and or portofolio or home for those TRILLIONS in home mortgages?
He can’t. It’s all talk.
I replied to the wrong post....sorry!
It would take a lot to transition to that here. I’ve long thought that SOME aspects (emphasis SOME) of the Canadian banking system could work here.
What about the liquidity issue? That is a legit concern, I think.
>>>I put 20% down in the 90’s, which allowed me to avoid PMI. Because it was a conforming mortgage that went through Fannie, I probably had a hair lower rate than I’d have paid otherwise (like a ‘jumbo’ of the time)—no big deal.>>>
It was no big deal to you, but it was a big deal to your lender who was able to give you a good rate, then sell the loan, get his money back and lend it to some other family buying their home.
And the money they LENT you came from Fannie too when they sold the loan they made to someone before you and sold it to Fannie. See how it worked?
I agree with you that F&F worked well until circa 1997 - 2002 timeframe.
However, I would be willing to also give the Canadian model a looksee.
They did...but loan officers did too, sometimes changing income or looking the other way. Takes two to tango, as they say.
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