Seeking Alpha

joegold » Comments » FRE

  • Five Questions About Government's Role in the Mortgage Business [View article]
    certain people moon, please elaborate what you mean by "certain people"....newsflash, the majority of lending in the past 5 years no matter what color, "income"(if documented), or region the loan was originated in was probably "sub-prime". The standards were relaxed for everyone. And please don't respond with the tired and subversively racist CRA excuse, it's getting old.


    On Sep 09 08:59 PM Moon Kil Woong wrote:

    > The government's role in home ownership has been touted by politicians
    > for years with both Fannie Mae and Freddie Mac who have made it impossible
    > for legitimate rivals as has the implementation on the Community
    > Reinvestment Act. Both have ben disasterous.
    >
    > As mentioned Fannie Mae and Freddie Mac has acted like a poison killing
    > off the mortgage market while entwining government in their overly
    > low interest loans which end up on the governments balance sheet
    > by either the Fed or Treasury buying them up or by simply losing
    > so much they need loans or money directly infused into their failing
    > corpse. Their business model is monopolistic. If there was real antitrust
    > enforcement in this industry they would have been broken up ages
    > ago.
    >
    > CRE has also been disasterous and is cited by Republicans as one
    > mjor facet for the problems in the mortgage market. By requiring
    > banks to loan to people with less than stellar credit and in certain
    > areas if they wish to do business they had created a vast market
    > of high risk loans. This was exacerbated when Glass Stegall was removed
    > thus letting insurance derivatives sterilize these bad loans which
    > encouraged even more gorging on bad loans. Finally, they were bundled
    > and sold to Fannie Mae and Freddie Mac as they still are today. Garbage
    > going onto garbage.
    >
    > Thanks for the article. Indeed the mortgage market has been socialized
    > for decades now. No wonder it unhinged from the real market and left
    > the government with massive losses. Being that it is still more than
    > ever dependent on the government makes us realize we are destined
    > to relive the recession we are in now. Give it a few years or a few
    > dacades depending on how unscrupulous the powers that be are.
    Sep 10 14:27 pm |Rating: +3 -3 |Link to Comment
More on FRE by joegold
Comments by Ticker
joegold's
Comments Stats
6 comments
Rating: 0 (5 - 5 )