Posted on 08/24/2011 7:56:09 PM PDT by tobyhill
The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.
One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.
A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.
Administration officials said on Wednesday that they were weighing a range of proposals, including changes to its previous refinancing programs to increase the number of homeowners taking part. They are also working on a home rental program that would try to shore up housing prices by preventing hundreds of thousands of foreclosed homes from flooding the market. That program is further along — the administration requested ideas for execution from the private sector earlier this month.
(Excerpt) Read more at nytimes.com ...
The boom gets started with an expansion of credit, the Fed sets rates low, are you starting to get it? That new money is confused for real loanable funds. But it’s just inflation that’s driving the ones, who invest in new projects like housing construction, the boom plants the seeds for its future destruction. The savings aren’t real, consumption’s up too, and the grasping for resources reveals there’s too few.
So the boom turns to bust as the interest rates rise. With the costs of production, price signals were lies. The boom was a binge, that’s a matter of fact. Now its devalued capital that makes up the slack.
Whether it’s the late twenties or two thousand and five, booming bad investments, seems like they’d thrive. You must save to invest, don’t use the printing press, or a bust will surely follow, an economy depressed.
Your so-called “stimulus” will make things even worse. It’s just more of the same, more incentives perversed. And that credit crunch ain’t a liquidity trap, just a broke banking system, I'm done, that's a wrap.
-Fear the boom and bust
I don’t wanna do nothing, there’s plenty to do. The question I ponder is who plans for whom. Do I plan for myself or leave it to you? I want plans by the many, not by the few. Let’s not repeat what created our troubles. I want real growth not a series of bubbles. Stop bailing out losers, let prices work. If we don’t try to steer them they won’t go berserk.
Oversight? The government’s long been in bed, with those Wall Street execs and the firms that they’ve bled. Capitalism is about profit and loss. You bail out the losers there is no end to the cost. The lesson I’ve learned is how little we know. The world is complex, not some circular flow. The economy is not a class you master in college, to think otherwise is the pretense of knowledge.
People aren’t chess men you move on a board at your whim, their dreams and desires ignored. With political incentives, discretion’s a joke. Those dials are twisting; just mirrors and smoke. We need stable rules and real market prices, so prosperity emerges and cuts short the crisis. Give us a chance, so we can discover, the most valuable ways to serve one another.
-Fight of the Century: Keynes vs. Hayek
I think both are appropriate. We need to stop bailing out the losers, whether that is Wall Street banks or homeowners. Let the foreclosures happen and let the housing prices fall to their natural level.
Why not? The govt already owns the entire student loan market.
What’s the worst that could happen?
Once again, this will only benefit the mortgage holder, or banks. Refinancing for another thirty years if you are ten into a mortgage means, in the end, the holder will end up with more interest earning than the original note.
Thats what I will do to thumb my nose @ Fannie, Freddie, Bawanee and Barry.....
I guarantee the Government will pay the banks the amount the owner financed then refinance at the lower rate and the taxpayers will be left holding the difference.
The bank's market shares went up on the news because they heard that they won't be the ones holding the bag, the taxpayer's will.
I had been with WF for almost 16 years. I re-fi’d down the number of years and a lower rate about 2 years ago.
I just looked at the Notifcation of Assignment. My note was sold to Freddie Mac ( Sorry...I thought is was Fannie)
Go to any village in England and you will see America within the next 10 years.
Most English don’t own their own homes. They lease them from the city councils and they call them “Council Homes.”
Here in the US we have basically the same system being set up. We call them Section 8 housing and public housing.
Eventually, the government will own most of the homes that they fraudulently mortgaged to a whole host of Democrat voters who could not qualify for a mortgage even if they robbed a bank. Now, under the master plan, these homes will become COUNCIL HOMES just like the ones they now manage under the name of the Housing Authority.
The plan is to DESTROY home valuation to the point that a majority of hard working, tax paying citizens will be so far “under water” in their mortgages that they too, will eventually have to walk away from their loans...only for those homes to be added to the Housing Authority’s list of assets...and control of the proles. (Have to read George Orwell to understand.)
Based on the criteria that the banks are using for conforming loans, they want all the notes to be less than the property is worth.
Otherwise you can’t get the 4%.
The only thing this would help you get out of is PMI.
But that’s what you don’t understand. It wasn’t so much sold to freddie as it was underwritten by freddie. If your loan didn’t conform to freddie standards it wouldn’t of ever been done.
And another point. You weren’t with WF for 16 years and I’ll be serious money on that. You may be paying WF every month but that’s only because WF carries your service contract and probably will continue to do so even though the interest is going to Freddie.
You are right. I still don't understand.
The notice of sale to Freddie is dated effective 04/10/2010.
Course, now that my curiosity has been tweaked, it's time to go on a scavenger hunt for more info, starting with WF.
Thanks again...
There are two parts to every loan. The loan itself and who gets the interest, and then who owns the service contract. If you understand that difference you will know why your loan was bought by freddie yet you continue to pay WF every month.
Many people who buy loans do not want to worry about collecting payments, don’t want to have the customer service people, and don’t want to worry about foreclosure proceedings.
WF is the 2nd mortgage servicer in the US behind BoA and that was because of their purchase of Countrywide.
Wells Fargo may be originiating your loan but in no way are they carrying the note. When it goes to underwriting it’s not WF standards, they have to conform to what Fannie and Freddie want or it’s a no go.
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