Obama Calls For End Of Fannie Mae, Freddie Mac
Posted in the Erie Forum
#1 Feb 11, 2011
NEW YORK -- The Obama administration plans to wind down bailed-out Fannie Mae and Freddie Mac over the next five to seven years, Treasury Secretary Timothy Geithner said Friday.
The taxpayer-owned mortgage giants, which were effectively nationalized in 2008, guarantee nine of every 10 new mortgages along with other government agencies. Delinquencies on home loans backed by the two companies have cost taxpayers more than $150 billion.
The troubled housing market, and the key role sour mortgages played in causing the financial crisis, has led to calls for the federal government to radically reform the way home mortgages are financed. The role of the government in funding those mortgages must also be altered, policy makers, bankers and investors say. Administration officials have vowed to reform the market. In a report delivered today to Congress, the administration outlined its goals for the future of housing finance, and three broad options for legislators to pursue.
The first option calls for a private system in which lenders and investors fund new mortgages, with a limited role for existing federal agencies to subsidize home loans for the poor and other special groups, like veterans.
The second proposal calls for much of the same, but it includes a government backstop for mortgages during times of market stress. If the market froze, the government would step in and guarantee home loans.
In the third option, the administration outlined a much broader government role. Under this alternative, taxpayers would insure securities backed by home loans.
administration's outline explained the benefits and costs of the various options, but stopped short of endorsing any of them. Critics will likely say the administration punted.
"We are going to start the process of reform now," Geithner said in a statement. "But we are going to do it responsibly and carefully so that we support the recovery and the process of repair of the housing market."
Geithner said it will take another three years for the housing market to recover. The housing sector currently suffers from high foreclosure and delinquency rates, low levels of homeowner equity, and an abundance of homes for sale without a corresponding number of interested buyers.
After that, it will likely take two to three years for policy makers to come to agreement on the government's role in funding home loans, Geithner said. The final step calls for new legislation.
#2 Feb 11, 2011
I wish obama would reform himself....that would be a big step in the right direction. But then, nutbags never change, that goes for factually. Rename your self factsfullofshit.
#3 Feb 11, 2011
go back to sally it suits your republican family values better with the cross dressing and all that
#4 Feb 11, 2011
Speak for yourself "twinkle toes". I bet your favorite color is pink...right? LMAO
#5 Feb 12, 2011
3 years of excess housing supply just sitting on the market, not counting the shadow market of houses the banks are just holding waiting for the price to go up, housing will not recover until it hits bottom and house prices are in line with wages.
More than nine million people qualify for HAMP, yet fewer than two million have taken advantage of the program. The reason for this is simple, the banks are jerking people around losing paper work, phone tag and many people must hire lawyers just to deal with a bank
So you have,
HAMP Second Lien Modification Program (2MP),
HAMP Home Affordable Foreclosure Alternatives Program (HAFA)
HAMP Home Affordable Unemployment Program (UP)
The banksters need to be FORCED to comply with the laws and codes regarding modifications and fair business practices.
Point is, if you dont have the wages (one wage earner instead of two) change the terms
CHANGE THE TERMS OF THE EXISTING LOAN
Offer taxpayers undergoing foreclosure the same rate the banks received
Interest Rate: 0.75% ARM*
Re-amortize loans to 50 years
Tie interest rates to the federal unemployment rate
ARM tied to the unemployment number.(6-month lag)
9.5 % >10 % unemployment =. 75%
9 %>9.5 % unemployment = 1.50%
8%>9 % unemployment = 2.25%
7%>8% unemployment = 3.00%
6%>7% unemployment = 3.75%
5%>6% unemployment = 4.75%
A $300,000 foreclosure loan would have its monthly payment of $1362.42 reduced to $599.75
A $200,000 loan monthly payment reduced to about $400.00
A $100,000 loan monthly payment reduced to about $200.00
The new loan would be nonassumeable and no type of HELOC
Can you see any stabilization of RE by having these homes off the market?
Can you see cash entering the economy?
**10-year bonds?30-year bonds? Who cares?
**Fannie and Freddie were seized by regulators in September 2008 as the financial crisis intensified.
The Bush administration pledged $200 billion to keep them solvent.
The Obama administration soon doubled that number to $400 billion.
Late last year it pledged unlimited support.
Lets get real and give taxpayers undergoing foreclosure a BREAK.
#6 Feb 12, 2011
Most of the blame for this mess belongs to the "USED HOUSE SALESMEN" because they should be the first to know how much house their clients can afford. These thugs like to push overly inflated priced houses that are way out of a person's price range because the greedy thugs are only interested in how much commission they will make.
The "USED HOUSE SALESMEN" are the first in a long line of greedy thugs who only care about themselves.
Dennis is just another "greedy realtor thug."
#7 Feb 12, 2011
Greed is rampant in this country, the dems prove it by giving to their own agenda's. We are paying the price, bailouts, giving free handouts to the illegals, babying the criminals, giving OUR jobs to forigners so in turn, the politicians get a kick back from those nations. I could go on and on but then TWTL thinks she has all the answers and I will await her rebutal in short order. She disagree's with those of us who don't totally agree with her rants. Proceed. One more thing tho, I do agree when she said "house salesman" are to blame, they sure had a hand in all this mess, no doubt about it.
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