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Agency (GSE-issued) MBS are SO compromised that the Federal Reserve had to create $2 Trillion to buy some of them. It was part of QE. Taxpayers pay interest on that created $2 Trillion.
Keep trying.
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The outstanding balance of non-agency mortgages grew from roughly $600 billion at the end of 2003 to $2.2
trillion at its peak in 2007, falling back to roughly $1.5 trillion as a result of the credit crisis.
And, by the way, note that there is NO line in which private sector-issued MBSs are listed.
lol
Origination information doesn't go on a balance sheet.
Once they're bought, guess what.... they're backed.
You're still looking at the wrong loans and only 1 document.
This research requires minimal effort for most anyone but proving extremely challenging for you.
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Around 80% of subprime loans were made with private-label MBS in 2006. In March 2007, the value of subprime mortgages was valued at around $1.3 trillion.
The mortgages issued by private lenders had greater risk since they were not backed by the government, like those from Freddie Mac and Fannie Mae.
Private sector-issued MBS aren't backed by the US Government.
They are when bought through the FHFA's recovery efforts.
18 banks were sued over this.
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Originally Posted by InformedConsent
No, I am not. If GSE-issued MBS weren't the problem, why did the Federal Reserve have to create an additional $2 Trillion in QE to buy them?
Reading seems hard for you.
Quote:
Around 80% of subprime loans were made with private-label MBS in 2006. In March 2007, the value of subprime mortgages was valued at around $1.3 trillion.
The mortgages issued by private lenders had greater risk since they were not backed by the government, like those from Freddie Mac and Fannie Mae.
Did "the banks" end up being responsible for or paying anywhere near the $2 Trillion taxpayers are on the hook for GSE-issued MBS?
Once again, that $1.7 trillion's not all agency-originated MBS.
And since their fines did not even approach the outstanding balance, why do you keep defending lenders and speculators here?
We're ALL on the hook for bad mortgages (agency & private-label MBS) but you refuse to consider or don't understand risky bank / investor activity.
Do you actually want another round of "too big to fail"?
You know - that we ALL are going to pay for AGAIN? Either look at banking changes happening RIGHT NOW and in recent history or be doomed to repeat this ALL OVER AGAIN. Earlier, there were concerns about the 3.5% FHA AND 3%FNM/FRM loans coming back. Private labels are making a comeback too. So - unless you want to buy some more loans, we might look to what capital is doing and not government. Pointing to a '92 housing guideline doesn't address present financing changes or banking deregulation.
If you really wanna be mad at gov meddling, look no further than the Fed and Bernanke.
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The low policy rates during the 2002-06 period were accompanied at various times by "forward guidance" on policy from the Committee. For example, beginning in August 2003, the FOMC noted in four post-meeting statements that policy was likely to remain accommodative for a "considerable period."
The aggressive monetary policy response in 2002 and 2003 was motivated by two principal factors. First, although the recession technically ended in late 2001, the recovery remained quite weak and "jobless" into the latter part of 2003. Real gross domestic product (GDP), which normally grows above trend in the early stages of an economic expansion, rose at an average pace just above 2 percent in 2002 and the first half of 2003, a rate insufficient to halt continued increases in the unemployment rate, which peaked above 6 percent in the first half of 2003.3 Second, the FOMC's policy response also reflected concerns about a possible unwelcome decline in inflation. Taking note of the painful experience of Japan, policymakers worried that the United States might sink into deflation and that, as one consequence, the FOMC's target interest rate might hit its zero lower bound, limiting the scope for further monetary accommodation. FOMC decisions during this period were informed by a strong consensus among researchers that, when faced with the risk of hitting the zero lower bound, policymakers should lower rates preemptively, thereby reducing the probability of ultimately being constrained by the lower bound on the policy interest rate.
nah, they already told them to discover SF. help drive the prices down. discover SF is much more appealing. maybe they can gain rights to the many million dollar homes that are left vacant since chinese investors just picked them up cash with no intent to live there.
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