GG Posted January 22, 2010 Share Posted January 22, 2010 Now you know they're running scared. "As I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their present form and coming up with a new whole system of housing finance [is in order]," House Financial Services Chairman Barney Frank (D, Mass.) said at a hearing." Link to comment Share on other sites More sharing options...
John Adams Posted January 22, 2010 Share Posted January 22, 2010 Now you know they're running scared. "As I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their present form and coming up with a new whole system of housing finance [is in order]," House Financial Services Chairman Barney Frank (D, Mass.) said at a hearing." 2 years later and hundreds of billions down the drain and now it's time to consider breaking them up? Piercing insight Senator Fudd. Link to comment Share on other sites More sharing options...
Magox Posted January 22, 2010 Share Posted January 22, 2010 That's not all, it appears that the W.H and the Geithner aren't on the same page. Link to comment Share on other sites More sharing options...
DC Tom Posted January 22, 2010 Share Posted January 22, 2010 2 years later and hundreds of billions down the drain and now it's time to consider breaking them up? Piercing insight Senator Fudd. I think the key words are "coming up with a new whole system of housing finance". Since Fannie and Freddie are guarantors of mortgage bonds, his statement is basically a shot across Wall Street's bow to the effect of "We want to de-securitize mortgages". Which will make borrowing more difficult, which runs completely counter to the government's long-term "housing is a right, not a responsibility" position and will depress long-term the real estate markets. And completely ignores the simple fact that Fannie's and Freddie's problems are due in no small part to Franks' committe's decisions to loosen the standards on Fannie and Freddie. So sure, Barney...rather than tighten the standards on Fannie and Freddie so that they don't have the exposure going forward to irresponsible borrowers that you encouraged to begin with, just blow it up and start over. That's responsible. Anyone else getting the sense that just maybe Barney Fife is in over his head? Link to comment Share on other sites More sharing options...
Magox Posted January 22, 2010 Share Posted January 22, 2010 I think the key words are "coming up with a new whole system of housing finance". Since Fannie and Freddie are guarantors of mortgage bonds, his statement is basically a shot across Wall Street's bow to the effect of "We want to de-securitize mortgages". Which will make borrowing more difficult, which runs completely counter to the government's long-term "housing is a right, not a responsibility" position and will depress long-term the real estate markets. And completely ignores the simple fact that Fannie's and Freddie's problems are due in no small part to Franks' committe's decisions to loosen the standards on Fannie and Freddie. So sure, Barney...rather than tighten the standards on Fannie and Freddie so that they don't have the exposure going forward to irresponsible borrowers that you encouraged to begin with, just blow it up and start over. That's responsible. Anyone else getting the sense that just maybe Barney Fife is in over his head? I noticed the exact same thing, regarding the "coming up with a new whole system of housing finance". And you're right, I do have a feeling that is does have to do with the de-securtization of mortgages, which as you stated would make liquidity for lending that much more difficult. These guys are masters of recognizing the problem but have no earthly !@#$ing clue in how to deal with the problems. Really, no !@#$ing clue. Link to comment Share on other sites More sharing options...
DC Tom Posted January 22, 2010 Share Posted January 22, 2010 I noticed the exact same thing, regarding the "coming up with a new whole system of housing finance". And you're right, I do have a feeling that is does have to do with the de-securtization of mortgages, which as you stated would make liquidity for lending that much more difficult. These guys are masters of recognizing the problem but have no earthly !@#$ing clue in how to deal with the problems. Really, no !@#$ing clue. I should have added: it's no coincidence that Ginnie Mae 1) never had their standards relaxed, and 2) never had to be bailed out by the government, despite having pretty much the same business model as Fannie and Freddie. So I disagree...I don't think they're capable of even recognizing the problem. Guarantors with low standards (Fannie, Freddie, AIG in a sense) had to be bailed out. Guarantors with high standards (Ginnie) didn't. It ain't !@#$ing rocket surgery. And I have no doubt that, if they have their way, that "whole new system of housing finance" will involve protecting borrowers' "right" to home ownership by moving all the risk of borrowing on to the lenders, but without giving the lenders any way to manage that risk themselves (e.g. "you must lend to people at this rate or lower, regardless of their qualification, no matter what"). Just like they're trying to do to health insurers. Link to comment Share on other sites More sharing options...
bills_fan Posted January 22, 2010 Share Posted January 22, 2010 I think the key words are "coming up with a new whole system of housing finance". Since Fannie and Freddie are guarantors of mortgage bonds, his statement is basically a shot across Wall Street's bow to the effect of "We want to de-securitize mortgages". Which will make borrowing more difficult, which runs completely counter to the government's long-term "housing is a right, not a responsibility" position and will depress long-term the real estate markets. And completely ignores the simple fact that Fannie's and Freddie's problems are due in no small part to Franks' committe's decisions to loosen the standards on Fannie and Freddie. So sure, Barney...rather than tighten the standards on Fannie and Freddie so that they don't have the exposure going forward to irresponsible borrowers that you encouraged to begin with, just blow it up and start over. That's responsible. Anyone else getting the sense that just maybe Barney Fife is in over his head? Which will, of course, cause even more homes to fall underwater, leading to more jingle mail, more distressed securities etc. I've had the feeling that Barney was in over his head since 2007. Link to comment Share on other sites More sharing options...
GG Posted January 22, 2010 Author Share Posted January 22, 2010 I should have added: it's no coincidence that Ginnie Mae 1) never had their standards relaxed, and 2) never had to be bailed out by the government, despite having pretty much the same business model as Fannie and Freddie. So I disagree...I don't think they're capable of even recognizing the problem. Guarantors with low standards (Fannie, Freddie, AIG in a sense) had to be bailed out. Guarantors with high standards (Ginnie) didn't. It ain't !@#$ing rocket surgery. Don't be too hasty with the adulation - Trouble in store? "Is anyone on Capitol Hill or the White House paying attention? Evidently not, because on both sides of Pennsylvania Avenue policy makers are busy giving the FHA even more business while easing its already loosy-goosy underwriting standards. A few weeks ago a House committee approved legislation to keep the FHA’s loan limit in high-income states like California at $729,750. We wonder how many first-time home buyers purchase a $725,000 home. The Members must have missed the IG’s warning that higher loan limits may mean “much greater losses by FHA” and will make fraudsters “much more attracted to the product.” And I have no doubt that, if they have their way, that "whole new system of housing finance" will involve protecting borrowers' "right" to home ownership by moving all the risk of borrowing on to the lenders, but without giving the lenders any way to manage that risk themselves (e.g. "you must lend to people at this rate or lower, regardless of their qualification, no matter what"). Just like they're trying to do to health insurers. Well, of course he wasn't going to eliminate them in their entirety. Just change the name. Link to comment Share on other sites More sharing options...
John Adams Posted January 22, 2010 Share Posted January 22, 2010 If the goal is getting people into more homes, the goal is WRONG. We need to fix the problem--not reshuffle it. Link to comment Share on other sites More sharing options...
DC Tom Posted January 22, 2010 Share Posted January 22, 2010 Don't be too hasty with the adulation - Trouble in store? I probably should have been more specific that I was speaking about recent history. I hadn't known FHA had their standards relaxed...I suppose, though, that it was inevitable, as with the Fannie and Freddie debacle the government had fewer options for their "put as many people in to homes as possible" policy. Well, of course he wasn't going to eliminate them in their entirety. Just change the name. And change the rules and regulations they and the lenders operate under, to shuffle the risk on to those evil, evil, greedy people who lend money rather than give it away for free, those bastards. Same thing, really. Link to comment Share on other sites More sharing options...
DC Tom Posted January 22, 2010 Share Posted January 22, 2010 We need to fix the problem--not reshuffle it. All US government policies can be described by the exact opposite. Link to comment Share on other sites More sharing options...
John Adams Posted January 22, 2010 Share Posted January 22, 2010 All US government policies can be described by the exact opposite. Yes. Fannie and Freddie will be broken down into smaller regional entities better able to understand and meet the needs of low-income families in their individual regions...yada yada...and therefore spread the risk of failure from a national one toa regional one that the government can more easily address. That mouthful of goobledeegook is probably the abstract for Barney's plan. Link to comment Share on other sites More sharing options...
IDBillzFan Posted January 22, 2010 Share Posted January 22, 2010 Yes. Fannie and Freddie will be broken down into smaller regional entities better able to understand and meet the needs of low-income families in their individual regions...yada yada... I think you just described ACORN. Link to comment Share on other sites More sharing options...
DC Tom Posted January 22, 2010 Share Posted January 22, 2010 Yes. Fannie and Freddie will be broken down into smaller regional entities better able to understand and meet the needs of low-income families in their individual regions...yada yada...and therefore spread the risk of failure from a national one toa regional one that the government can more easily address. That mouthful of goobledeegook is probably the abstract for Barney's plan. In the interest of fair warning: if I ever hear anything like that suggested as a serious plan by someone (like Frank) in a position of authority, I'm going to go postal. Link to comment Share on other sites More sharing options...
ieatcrayonz Posted January 22, 2010 Share Posted January 22, 2010 2 years later and hundreds of billions down the drain and now it's time to consider breaking them up? Piercing insight Senator Fudd. Technically, it's representative Fudd. Link to comment Share on other sites More sharing options...
/dev/null Posted January 22, 2010 Share Posted January 22, 2010 Technically, it's representative Fudd. Wabbit Season Link to comment Share on other sites More sharing options...
OCinBuffalo Posted January 23, 2010 Share Posted January 23, 2010 Technically, it's representative Fudd. Technically, it's wepwesentative Fudd. Link to comment Share on other sites More sharing options...
Booster4324 Posted January 23, 2010 Share Posted January 23, 2010 Technically, it's wepwesentative Fudd. Link to comment Share on other sites More sharing options...
John Adams Posted January 23, 2010 Share Posted January 23, 2010 Technically, it's wepwesentative Fudd. Post of the week. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted January 23, 2010 Share Posted January 23, 2010 Technically, it's wepwesentative Fudd. Was he not in charge of Fweddie Mac? Link to comment Share on other sites More sharing options...
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