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Fannie and Freddie tab is $146B and rising

jujuman13

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Fannie and Freddie tab is $146B and rising - STLtoday.com

Quote(Fannie Mae and Freddie Mac took over a foreclosed home roughly every 90 seconds during the first three months of the year. They owned 163,828 houses at the end of March, a virtual city with more houses than Seattle. The mortgage finance companies, created by Congress to help Americans buy homes, have become two of the nation’s largest landlords.)

Congress should never have created these two monstrosities.

Quote(Bill Bridwell, a real estate agent in the desert south of Phoenix, is among the thousands of agents hired nationwide by the companies to sell those foreclosures, recouping some of the money that borrowers failed to repay. In a good week, he sells 20 homes and Fannie sends another 20 listings his way.

“We’re all working for the government now,” said Bridwell on a recent sun-baked morning, steering a Hummer through subdivisions laid out like circuit boards on the desert floor.

For all the focus on the historic federal rescue of the banking industry, it is the government’s decision to seize Fannie Mae and Freddie Mac in September 2008 that is likely to cost taxpayers the most money. So far the tab stands at $145.9 billion, and it grows with every foreclosure of a three-bedroom home with a two-car garage one hour from Phoenix. The Congressional Budget Office has predicted that the final bill could reach $389 billion.)

So yet more money has to found from somewhere to rescue these monolithic entities.

And NO I AM NOT GOING TO BLAME OBAMA for this particular mess, in fact I am 100% certain that he had absolutely nothing to do with the way these two were handing out Mortgages as though it were candy.
This mess was started By Bill Clinton and his administration.
 

USA_1

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This mess was started By Bill Clinton and his administration.
No, this mess was created by GWB and Warren Greenspan. They created the housing boom and bubble. They tried to use the housing sector to pull us out of the recession of '01. Had interest rates remained at normal levels and lending restrictions not relaxed, the refinancing, home building and lending frenzy would never have happened.
 

Deuce

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It was me. This one was my fault. :(

Sorry dudes, my bad. I was just tryin' to help.
 

Goyboy

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No, this mess was created by GWB and Warren Greenspan. They created the housing boom and bubble. They tried to use the housing sector to pull us out of the recession of '01. Had interest rates remained at normal levels and lending restrictions not relaxed, the refinancing, home building and lending frenzy would never have happened.
:bs

No presidential administration forced people to obtain home loans that they could not pay back.
No American President ordered private financial institutions to give sub-prime loans to people who couldn't afford them.

Loan officers, not American Presidents, have the responsibility of checking the financial backgrounds of loan applicants. Loan officers, not American Presidents, have the responsibility of either approving or rejection loan applications.

You might believe that a particular American President is Scapegoat-in-Chief, but I do not.

One complaint that I have about my fellow Americans is that they are too quick to blame the President for things that the President has no control over.
 

USA_1

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THE HOUSING BUBBLE COULD NOT HAVE OCCURRED WITHOUT RECORD LOW INTEREST RATES AND RELAXED LENDING REQUIREMENTS. Hell, George even eliminated down payments. The president did have control over housing. He tried to make this an ownership society.

You can remain in denial. but the truth is the truth:
http://www.youtube.com/watch?v=kNqQx7sjoS8
 
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Lord Tammerlain

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:bs

No presidential administration forced people to obtain home loans that they could not pay back.
No American President ordered private financial institutions to give sub-prime loans to people who couldn't afford them.

Loan officers, not American Presidents, have the responsibility of checking the financial backgrounds of loan applicants. Loan officers, not American Presidents, have the responsibility of either approving or rejection loan applications.

You might believe that a particular American President is Scapegoat-in-Chief, but I do not.

One complaint that I have about my fellow Americans is that they are too quick to blame the President for things that the President has no control over.
THE HOUSING BUBBLE COULD NOT HAVE OCCURRED WITHOUT RECORD LOW INTEREST RATES AND RELAXED LENDING REQUIREMENTS. Hell, George even eliminated down payments. The president did have control over housing. He tried to make this an ownership society.

You can remain in denial. but the truth is the truth:
YouTube - Home Ownership and President Bush
Both are correct to some degree

The housing bubble would not have taken place without both things occuring

Greenspan and Bush creating the economic environment that encouraged the housing bubble to form, which would not have happened if the public at large did not take take advantage of the environment that was created by Greenspan and the Bush admin
 

NolaMan

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THE HOUSING BUBBLE COULD NOT HAVE OCCURRED WITHOUT RECORD LOW INTEREST RATES AND RELAXED LENDING REQUIREMENTS. Hell, George even eliminated down payments. The president did have control over housing. He tried to make this an ownership society.

You can remain in denial. but the truth is the truth:
YouTube - Home Ownership and President Bush
Business Week - Bill Clinton's drive to increase homeownership went way too far.

Add President Clinton to the long list of people who deserve a share of the blame for the housing bubble and bust. A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place.

President Bush continued the practices because they dovetailed with his Ownership Society goals, and of course Congress was strongly behind the push. But Clinton and his administration must shoulder some of the blame.
This cannot be placed on the shoulders of any one President, no matter how much you all would like to try.
 

USA_1

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The bubble didn't start until after 9/11 when interest rates were set at record low levels, and Bush used the housing sector to save the economy from the recession.. Working in the housing industry I could see it while it was happening. I can not believe no one else could.
Without the low interest and Bushes push for more home ownership the residential construction boom would have never happened. Home buying would have remained at normal levels. Prices would not have skyrocketed scaring even more people to buy before they couldn't afford it.
The housing boom and bubble happened after GWB took office. Instead of heading warnings about the bubble he made it worse.

Sorry, but Bush is totally responsible for the economic collapse. Clinton had been gone for eight years.
It was Bush that eliminated down payments. Not Clinton.
http://www.usatoday.com/money/perfi/housing/2004-01-20-fha_x.htm
In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans
 
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USA_1

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NolaMan

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This chart shows what obscenely low interest rates and Bush's attempt to increase home ownership will do. It is proof that the mess was created on his watch. HE IS RESPONSIBLE FOR DESTROYING OUR GREAT COUNTRY.
Obscenely low interest rates are not a creation of the Bush administration however. Here is a NYT article from 1999 outlining how Fannie Mae was easing credit requirements to give more risky loans.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
I am not here to say "this was Clinton's fault" or "this was Bush's fault", the fact is it was a long process that both parties pushed, and we all now know the outcome.
 

USA_1

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I am not here to say "this was Clinton's fault" or "this was Bush's fault", the fact is it was a long process that both parties pushed, and we all now know the outcome.
Actually it was a short process. Greenspan lowered interest rates and Bush tried to make everyone a home owner. The chart proves it.
I work in the housing industry and we trippled our workforce after 9/11 to keep up with the artificial demand created by those two boneheads.
It should have never happened.
 

NolaMan

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Actually it was a short process. Greenspan lowered interest rates and Bush tried to make everyone a home owner. The chart proves it.
I work in the housing industry and we trippled our workforce after 9/11 to keep up with the artificial demand created by those two boneheads.
It should have never happened.
Which was just basically an extension and taking further of government programs already in place before he got to office...
 

Aunt Spiker

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Zee bubblez zee politicianz zee mediaz zee prezidentz

none of these are to blame.

Who is to blame?
The interest groups who lobbied and pushed for their notion that owning a home was a RIGHT - and being a right it was then suppose to be granted and secured for people without question. . .And also give that blame directly to the individuals who KNEW they couldn't afford (or had no intention of) paying on a 30 year mortgage but went for it, anyway.

We can't harp all over an issue without first pointing fingers at the people who FIRST got it going and those who bit the hook after it was tossed into the cool pool.
 

USA_1

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Which was just basically an extension and taking further of government programs already in place before he got to office...
No, it was a whole new ball game. Low interest and relaxed lending policies. A lot of people made a lot of money off the housing boom. Bush and Greenspan created it. They are responsible for it's consequences.
 

USA_1

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Zee bubblez zee politicianz zee mediaz zee prezidentz

none of these are to blame.

Who is to blame?
The interest groups who lobbied and pushed for their notion that owning a home was a RIGHT - and being a right it was then suppose to be granted and secured for people without question. . .And also give that blame directly to the individuals who KNEW they couldn't afford (or had no intention of) paying on a 30 year mortgage but went for it, anyway.

We can't harp all over an issue without first pointing fingers at the people who FIRST got it going and those who bit the hook after it was tossed into the cool pool.
Wrong. YouTube - Home Ownership and President Bush
 

NolaMan

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No, it was a whole new ball game. Low interest and relaxed lending policies. A lot of people made a lot of money off the housing boom. Bush and Greenspan created it. They are responsible for it's consequences.
Then what was the deal with the 1999 NYT story discussing how Fannie Mae was easing credit requirements for people who could not really qualify for a loan under pressure from the Clinton Administration?
 

Aunt Spiker

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So - what - you think Bush just woke up one morning and had that idea come to his head?
Or did he step out of the shower all hot n steamy and this glorious fail of a pail idea just steamed it's way into his heart?

Special interest groups and their lobbiests are the sole ticking clock of Washington - they have the power to twist arms and put on pressure - they were at the start of the whole entire idea.
 

USA_1

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So - what - you think Bush just woke up one morning and had that idea come to his head?
Or did he step out of the shower all hot n steamy and this glorious fail of a pail idea just steamed it's way into his heart?

Special interest groups and their lobbiests are the sole ticking clock of Washington - they have the power to twist arms and put on pressure - they were at the start of the whole entire idea.
His economic advisors told him manipulating the housing sector and increasing demand for homes would be a great way to stimulate the economy. Greenspan played right along. It was just that simple.
 

justabubba

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Fannie and Freddie tab is $146B and rising - STLtoday.com

Quote(Fannie Mae and Freddie Mac took over a foreclosed home roughly every 90 seconds during the first three months of the year. They owned 163,828 houses at the end of March, a virtual city with more houses than Seattle. The mortgage finance companies, created by Congress to help Americans buy homes, have become two of the nation’s largest landlords.)

Congress should never have created these two monstrosities.
actually, those "monstrosities", created during the end of the depression, fueled the growth of home ownership after WWII
Fannie Mae was so successful, so profitable, it was 'privatized' ... such that the stockholders enjoyed the profits but when things turned sour, the American taxpayer paid for the losses. yes, the GSEs which privatized profits and socialized losses were taken from successful government administration to private ownership and administration ... under the presidency of a republican, nixon, in 1969. Freddie Mac was begun in 1970 - also during his regime

Quote(Bill Bridwell, a real estate agent in the desert south of Phoenix, is among the thousands of agents hired nationwide by the companies to sell those foreclosures, recouping some of the money that borrowers failed to repay. In a good week, he sells 20 homes and Fannie sends another 20 listings his way.

“We’re all working for the government now,” said Bridwell on a recent sun-baked morning, steering a Hummer through subdivisions laid out like circuit boards on the desert floor.
For all the focus on the historic federal rescue of the banking industry, it is the government’s decision to seize Fannie Mae and Freddie Mac in September 2008 that is likely to cost taxpayers the most money. So far the tab stands at $145.9 billion, and it grows with every foreclosure of a three-bedroom home with a two-car garage one hour from Phoenix. The Congressional Budget Office has predicted that the final bill could reach $389 billion.)

So yet more money has to found from somewhere to rescue these monolithic entities.
yes, that is what happens when the government agrees to incur any losses while it allows the privateers to enjoy any profits. a 'heads i win, tails you lose' kind of proposition

And NO I AM NOT GOING TO BLAME OBAMA for this particular mess, in fact I am 100% certain that he had absolutely nothing to do with the way these two were handing out Mortgages as though it were candy.
This mess was started By Bill Clinton and his administration.
it appears you are looking to blame the wrong fellow
nixon privatized the GSEs, relinquishing their profits while continuing to expose their potential losses to the taxpayer. USA-1 has provided the youtube where dubya bin lyin eliminated the down payment providions, and eliminated the "paperwork" burden ... he eliminated the documentation which allowed the liar loans to flourish
and you probably don't know it - or refuse to acknowledge it - but the bulk of the GSEs' losses are NOT from the loans they underwrote. they imposed credit criteria to which lenders had to "conform" if they wanted to sell their mortgages to the GSEs. it was the NONconforming loans which were the biggest part of the meltdown. those high risk, high profit loans could not be packaged quickly enough for the securitization sales on the international investment market. those loans were misrepresented by the rating houses. those ratings institutions had a vested interest in seeing that they were high rated, even if they were not. but where were bush's regulators?
it was the GSEs, which were doing little business because they required conforming - rather than liar- loans, fearing that they were missing out on all the profits being churned by the mortgage industry that jumped into the securitization market with both feet. its Board insisted; the stockholders were expecting better returns than conforming loans would generate. so, the GSEs jumped into the securitized debt offering market with both feet. why not. the profits would be passed to the stockholders and any losses would be turned over to the American taxpayer. this happened on the shrub's watch, while investigations were going on about the irreconcilable financials provided to congress by the GSEs. this happend on dubya's watch
 

Lord Tammerlain

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actually, those "monstrosities", created during the end of the depression, fueled the growth of home ownership after WWII
Fannie Mae was so successful, so profitable, it was 'privatized' ... such that the stockholders enjoyed the profits but when things turned sour, the American taxpayer paid for the losses. yes, the GSEs which privatized profits and socialized losses were taken from successful government administration to private ownership and administration ... under the presidency of a republican, nixon, in 1969. Freddie Mac was begun in 1970 - also during his regime




yes, that is what happens when the government agrees to incur any losses while it allows the privateers to enjoy any profits. a 'heads i win, tails you lose' kind of proposition


it appears you are looking to blame the wrong fellow
nixon privatized the GSEs, relinquishing their profits while continuing to expose their potential losses to the taxpayer. USA-1 has provided the youtube where dubya bin lyin eliminated the down payment providions, and eliminated the "paperwork" burden ... he eliminated the documentation which allowed the liar loans to flourish
and you probably don't know it - or refuse to acknowledge it - but the bulk of the GSEs' losses are NOT from the loans they underwrote. they imposed credit criteria to which lenders had to "conform" if they wanted to sell their mortgages to the GSEs. it was the NONconforming loans which were the biggest part of the meltdown. those high risk, high profit loans could not be packaged quickly enough for the securitization sales on the international investment market. those loans were misrepresented by the rating houses. those ratings institutions had a vested interest in seeing that they were high rated, even if they were not. but where were bush's regulators?
it was the GSEs, which were doing little business because they required conforming - rather than liar- loans, fearing that they were missing out on all the profits being churned by the mortgage industry that jumped into the securitization market with both feet. its Board insisted; the stockholders were expecting better returns than conforming loans would generate. so, the GSEs jumped into the securitized debt offering market with both feet. why not. the profits would be passed to the stockholders and any losses would be turned over to the American taxpayer. this happened on the shrub's watch, while investigations were going on about the irreconcilable financials provided to congress by the GSEs. this happend on dubya's watch
That is just crazy talk

We all know it was the most powerfull man in the universe's fault

Barny Frank, lowly congressmen by day, but avenging gay superhero by night, able to cause the most powerfull financial institutions to make the most idiotic loans, able to overpower a Republican President, Congress and Senate and force his super agenda on the US government
 

NolaMan

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Non of the subprime loans were Fannie Mae.

YouTube - Home Ownership and President Bush
Fannie didn't actually make the loan, but they bought the loans and essentially insured them, and they got tax incentives to do so. According to the WSJ, in 1996, HUD set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.

Before this, beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers.

I think it is dodging the issue to argue that Fannie did not give any of these loans, and ignore that they were were basically required by the government to purchase billions of dollars worth of these loans, thus driving up demand.
 
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lizzie

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No, it was a whole new ball game. Low interest and relaxed lending policies. A lot of people made a lot of money off the housing boom. Bush and Greenspan created it. They are responsible for it's consequences.
It was more of an "all of the above" problem.

The US housing bubble was actually caused by regional government restriction of land supply coupled with federal laws that increased the demand for homes.
The regions affected were properties in the metropolitan areas of the east and west coast.[3] [4] The local areas restricted building under the guise of “smart growth” or through restrictive zoning laws and planning commissions, whatever the name, the net effect was to restrict land supply and thus drive up the cost of land in these areas.
Starting with the Community Reinvestment Act (CRA) of 1977 Congress forced banks to give loans they would not otherwise give.[5] This raised demand and gathered momentum after Reagan left office when the White House pressured HUD,[6] the Attorney General,[7] The Federal Reserve and all institutions with regulatory authority over banks to pressure them to make loans to low income Afro-Americans using racial statistics to determine whether the banks were compliant. Jonathan R. Macey, a professor at Cornell University Law School, stated "No bank, no matter what it does, is safe from charges of discrimination. And this is true despite the fact that the industry spends over half of its profits to comply with regulations."[7]
In 1995 these regulating agencies required the use of “innovative or flexible” lending practices.[8] Fannie Mae and Freddie Mac were pressured to lower their down payment requirement as well.[9] In 2002 Congress passed the American Dream Down Payment Act which subsidized the down payments of low income home buyers. These loans were encouraged by the Federal Reserve which had lowered the interest it charges to 1%.
The Federal Reserve began raising the rates in 2004. By 2006 the rates were 5.25% which lowered the demand and for those on adjustable rate mortgages increased their payments until they couldn’t pay anymore. The foreclosures followed increasing supply dropping housing prices further.
The mortgages had been bundled together and sold on Wall Street to investors and other countries who were looking for a higher return than the 1% offered by Federal Reserve. Instead of the limited regions suffering the housing drop it was felt around the world. The same Federal Reserve that had enforced sanctions on those banks who didn’t give these loans now suggested bank take overs and more regulations. The Congressmen who had pushed the hardest to create these “subprime loans”[10][11] now blamed Wall Street for selling them.[12][13] (So far none of these laws have been repealed. They are simply not being enforced.)
……………….

In 1995, Fannie Mae and Freddie Mac began receiving affordable housing credit for buying subprime securities [76]
Some borrowers got around downpayment requirements by using seller-funded downpayment assistance programs (DPA), in which a seller gives money to a charitable organizations that then give the money to them. From 2000 through 2006, more than 650,000 buyers got their down payments through nonprofits.[77] According to a Government Accountability Office study, there are higher default and foreclosure rates for these mortgages. The study also showed that sellers inflated home prices to recoup their contributions to the nonprofits.[78] On May 4, 2006 the IRS ruled that such plans are no longer eligible for non-profit status due to the circular nature of the cash flow, in which the seller pays the charity a "fee" after closing.[79] On October 31, 2007 the Department of Housing and Urban Development adopted new regulations banning so-called "seller-funded" downpayment programs. Most must cease providing grants on FHA loans immediately; one can operate until March 31, 2008.[77]

Causes of the United States housing bubble - Wikipedia, the free encyclopedia
 

USA_1

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To blame the meltdown on the Community Reinvestment Act is totalt nonsense. The sub-prime debacle has many causes, including greed, lack of and ineffective regulation, failures of risk assessment and management, and misplaced optimism. But CRA is not to blame.

First, the timing is all wrong. CRA was enacted in 1977, its companion disclosure statute, the Home Mortgage Disclosure Act (HMDA) in 1975. While many warned against bad subprime lending before the turn of the millennium, the massive breakdown of underwriting and extension of risky products far down the income scale-without bothering to even check on income-was primarily a post-2003 phenomenon. To blame a statute enacted in 1977 for something that happened 25 years later is quite a stretch.
 
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