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Too funny....
Once upon a time, most mortages required 50% down and matured in 5 years at which time they required a balloon payment or refinancing at current rates. Banks typically used deposits to finance mortgages cause the funds have to come from somewhere.
Most of the population were renters back then, for the obvious reasons. Most renters lived in what would be considered ghetto, today. Even then, about 50% of homes went into foreclosure during the Great Depression and took a huge number of banks and deposits with them.
Given all this, no bank was willing to lend money to anyone in need of a mortgage. The New Deal created the framework for FNMA and the secondary market for U.S. Government insured or guaranteed programs. And the rest is history.
In the 60's FNMA was spun off into a separate entity with special privleges in exchange for marching to the beat of HUD. It was nothing more than a balance sheet manuver. FHLMC was created in the 70's to compete with FNMA and given the same status.
Last time I checked, FNMA/FHLMC were involved in the majority of home financing. Guess we could eliminate them and let things revert back to how it used to be. I guess we could also eliminate the FDIC thing, too.
Too funny....
Once upon a time, most mortages required 50% down and matured in 5 years at which time they required a balloon payment or refinancing at current rates. Banks typically used deposits to finance mortgages cause the funds have to come from somewhere.
Most of the population were renters back then, for the obvious reasons. Most renters lived in what would be considered ghetto, today. Even then, about 50% of homes went into foreclosure during the Great Depression and took a huge number of banks and deposits with them.
Given all this, no bank was willing to lend money to anyone in need of a mortgage. The New Deal created the framework for FNMA and the secondary market for U.S. Government insured or guaranteed programs. And the rest is history.
In the 60's FNMA was spun off into a separate entity with special privleges in exchange for marching to the beat of HUD. It was nothing more than a balance sheet manuver. FHLMC was created in the 70's to compete with FNMA and given the same status.
Last time I checked, FNMA/FHLMC were involved in the majority of home financing. Guess we could eliminate them and let things revert back to how it used to be. I guess we could also eliminate the FDIC thing, too.
I don't know, but they are not helping their case by refusing to sell off their foreclosed properties!
I had a foreclosure with Fannie Mae fall through last week. Appraisal came back $7k low, subject to about $5k in repairs. Client switched to a cash sale with a $12k price reduction to conform with the appraisal, and Fannie refused to negotiate price, even though we had a conventional appraisal. So it really burns me up knowing that they are crying for another bailout but not being realistic in selling off their properties.
I don't know, but they are not helping their case by refusing to sell off their foreclosed properties!
I had a foreclosure with Fannie Mae fall through last week. Appraisal came back $7k low, subject to about $5k in repairs. Client switched to a cash sale with a $12k price reduction to conform with the appraisal, and Fannie refused to negotiate price, even though we had a conventional appraisal. So it really burns me up knowing that they are crying for another bailout but not being realistic in selling off their properties.
Fannie/Freddie hold very FEW mortgages in their portfolio. Most are bundled and sold to investors. There is no way to unbundle one or two.
Let's not forget GNMA who puts the full faith of the government behind their mortgage pass-thru securities, collateralized primarily with VA/FHA insured loans, subject to a cap imposed by Congress, each year.
If they wind down the GSE, then who will make loans to poor people? What's the point of winding them down when they probably just create another one in its place...
If they wind down the GSE, then who willmake loans to poor people? What's the point of winding them down when they probably just create another one in its place...
Without a GSE, where will funding for the so called middle class, with a down payment, come from?
If they wind down the GSE, then who will make loans to poor people? What's the point of winding them down when they probably just create another one in its place...
Well, those who own property will loan these poor people the usage of their property, on a monthy basis, for a fee.
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