Posted on 12/30/2010 8:33:46 AM PST by dr_who
Earlier this year, leading House Republicans proposed to privatize mortgage giants Fannie Mae and Freddie Mac or place them in receivership starting in two years.
Now, as Republicans prepare to assume control of the House next week, they aren't in as big a rush, cautioning that withdrawing government support in the housing market should be gradual.
"We recognize that some things can be done overnight and other things can't be," said Rep. Scott Garrett (R., N.J.), incoming chairman of the House Financial Services subcommittee, which oversees Fannie and Freddie. "You have to recognize what the impact would be on the fragile housing market as it stands right now."
Fannie and Freddie, which buy mortgages from lenders and package them into securities that it sells to investors, were placed into government conservatorship in September 2008 after they nearly failed as losses from the housing bust started to mount. Keeping them afloat has cost taxpayers about $134 billion so far, and the companies' federal regulator estimates it could cost about $20 billion more. By comparison, the broader Troubled Asset Relief Program, which bailed out the rest of the financial industry, is projected to cost $25 billion.
(Excerpt) Read more at online.wsj.com ...
We have another election in two years. If the leopard wants to change its spots we need to replace the leopard.
We have another election in two years. If the leopard wants to change its spots we need to replace the leopard.
Yep, those elections really worked.
CUT IT OFF NOW!!!
There is no consequence of that which can be worse than keeping it running
Mr. McBadCombover needs to get a clue that more bailouts is not going to cut it.
They may have discovered that a large percentage of mortgages issued or purchased by Fannie, Freddie have had no note transfers and no title transfers by mortgage servicers (banks), and ownership of the mortgages is indeterminate if pursued for non-Robo signer legitimacy. Robo-signer legitimacy is, of course, not legitimate at all.
No one in their right mind should purchase, in a privatization measure, such legally undocumented mortgage instruments. All the mortgages should be repatriated to their point of origin...the banks. That is the problem...the banks never intended to bring them back on their books, and will have to take them as losses in the light of day.
Quit stealing from the responsible to support the irresponsible!!!!
I understand a need for a transition, but the govt needs to implement much more restrictive rules on what kinds of loans Fannie and Freddie can and cannot back.
Higher down payments, better debt-to-income ratios, fixed rate loans only, focus on existing homes, especially those that are foreclosed and deeply discounted, etc.
This stance might be the best for now. The housing market is going to dip again in 2011. It will keep the economy from recovering, most likely. If the GOP were to trash Freddie and Fannie in January the media and the Dems (sorry to be redundant) would lay the blame on the incoming Freshmen. Their political clout would become ZERO!
Might be much better to wait until the housing bottoms out. Use hearings to force moderate behavior until then. Pull the plug just about mid-summer based on the hearings, but after the housing is as bad as its gonna get.
I guess the checks from Fannie and Freddie finally cleared.
The "fragile housing market" can go bite me.
The way you stabilize housing values is by job and income growth, not by anal osculation of the banking sector.
The housing market won’t really recover until it finds a bottom. And that won’t happen until the entire industry starts doing things differently.
Other than FHA, Fred and Fran are the only ones willing to loan for 30 years. Your local corner banker isn't going to loan money for 30 years at these rates. When inflation ticks ups, it would put them out of business..
It was only a start... only a fool believed differently.
LLS
“We have another election in two years. If the leopard wants to change its spots we need to replace the leopard.”
My thoughts exactly. No guts, no political career.
You people need to get your heads out of your collected asses. Stop allowing the figgin media to set the terms of the discussion. Scott Garrett is a principled, hard core conservative, and very intellegent LEADER. I trust the man. I know where he wants to take this issue. And it is the same place we want to take it. A totally free market...eventually. And however he chooses to get us there I am sure he has his reasons. He is the best we’ve got.
Amen to that. Minimum 7.5% down payment on 30-year fixed rates (exception: VA on the down payment). That, more than anything else will create the built-in process ownership the buyer will have, lessening the likelihood of default later.
Those "creative financing, no-down, 'stated income'" schemes that laid the groundwork for the current situation should be forever relegated to the past. If the buyer can't afford a down payment, any idea of purchasing a home should be deferred.
The real estate market is far too tenuous at present to absorb another potential implosion, and a sudden and swift sea change in the operation of Fanny and Freddy could create just such an impact.
IMO, a transitional period is necessary with certain and clearly defined milestones. Set a date certain for full privatization and march inexorably toward that goal. This approach, vs. a sudden change, will allow the markets to adjust.
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